After years of stagnation, 401(k) policies are beginning to earn cash again, which is great news for a lot of people. Those looking down the barrel of retirement and those just beginning to save for it are sure to be relieved.
Get the retirement plan you were promised
In the past few years, many people who have 401(k) policies were shocked to see them go from being nest eggs to rotten ones as the stock industry tanked. A large number of current and soon-to-be retirees were mortified and cast into uncertainty. According to the Huffington Post, numerous surveys of individuals in what is called "Generation Y," the people born after Generation X and missed out on wearing flannel, have indicated this demographic are somewhat pessimistic about retirement.
A bunch of 401(k) policies and accounts are beginning to make more cash now, which is some good news for lots of people nearing retirement, according to USA Today.
Up 25 percent
USA Today reports that several numbers have been reported, but they all show positive gains in the plans. 401(k) plans are tax-protected mutual funds, more or less, so when Lipper reported an 11.4 percent increase in the typical stock mutual fund, it essentially meant that retirement accounts are increasing by at least that much.
Lipper also found the typical stock mutual fund has valued 124 percent since the industry hit bottom in 2009. Aon Hewitt, a large handler of 401(k) accounts, recently found the typical 401(k) plan had $74,380, compared to $70,970 at the start of the year.
Time magazine pointed out that the typical employer-sponsored retirement plan valued 25 percent during the last three years, 401(k) plans increased 28 percent, as reported by investment firm Funds Advisor.
There was an 80 percent increase seen in Mississippi and 1 percent in Arkansas, so it obviously varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in cash regularly
The one thing that is most important is that those who contributed the most money saw the biggest gains in their 401(k) plans, according to USA Today and Time.
The way the accounts are intended to work is a sort of "snowball" effect. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means a little cash out of pocket per month, it's almost like making a personal loan to one's self.
Get the retirement plan you were promised
In the past few years, many people who have 401(k) policies were shocked to see them go from being nest eggs to rotten ones as the stock industry tanked. A large number of current and soon-to-be retirees were mortified and cast into uncertainty. According to the Huffington Post, numerous surveys of individuals in what is called "Generation Y," the people born after Generation X and missed out on wearing flannel, have indicated this demographic are somewhat pessimistic about retirement.
A bunch of 401(k) policies and accounts are beginning to make more cash now, which is some good news for lots of people nearing retirement, according to USA Today.
Up 25 percent
USA Today reports that several numbers have been reported, but they all show positive gains in the plans. 401(k) plans are tax-protected mutual funds, more or less, so when Lipper reported an 11.4 percent increase in the typical stock mutual fund, it essentially meant that retirement accounts are increasing by at least that much.
Lipper also found the typical stock mutual fund has valued 124 percent since the industry hit bottom in 2009. Aon Hewitt, a large handler of 401(k) accounts, recently found the typical 401(k) plan had $74,380, compared to $70,970 at the start of the year.
Time magazine pointed out that the typical employer-sponsored retirement plan valued 25 percent during the last three years, 401(k) plans increased 28 percent, as reported by investment firm Funds Advisor.
There was an 80 percent increase seen in Mississippi and 1 percent in Arkansas, so it obviously varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in cash regularly
The one thing that is most important is that those who contributed the most money saw the biggest gains in their 401(k) plans, according to USA Today and Time.
The way the accounts are intended to work is a sort of "snowball" effect. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means a little cash out of pocket per month, it's almost like making a personal loan to one's self.
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