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 happy.
Do not be concerned about retirement
When the economy tanked, so did most 401(k) accounts invested mostly in stock. That meant a ton of retirees and soon-to-be retirees were really struggling for a few years. Now, "Generation Y" is really negative about the potential for retirement.
However, a number of surveys, studies and information released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) policies or rather 401(k) accounts are beginning to earn again.
A 25 percent boost
USA Today reports that several numbers have been reported, but they all show positive gains in the plans. 401(k) policies are tax-protected mutual funds, more or less, so when Lipper reported an 11.4 percent increase in the typical stock mutual fund, it basically meant that retirement accounts are growing by at least that much.
Lipper also found the average stock mutual fund has appreciated 124 percent since the market 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 beginning of the year.
Time magazine pointed out that the average 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 definitely varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in money regularly
The one thing that is most important is that those who contributed the most money saw the biggest gains in their 401(k) policies, according to USA Today and Time.
If you can put just a little more money into your account each month, it will be able to make more cash in the end. It is a "snowball" effect where the snowball gets bigger as it rolls down the bill and gets more snow. The 401(k) will get bigger without putting additional money in, but it can gain more if you put extra cash in regularly.
Do not be concerned about retirement
When the economy tanked, so did most 401(k) accounts invested mostly in stock. That meant a ton of retirees and soon-to-be retirees were really struggling for a few years. Now, "Generation Y" is really negative about the potential for retirement.
However, a number of surveys, studies and information released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) policies or rather 401(k) accounts are beginning to earn again.
A 25 percent boost
USA Today reports that several numbers have been reported, but they all show positive gains in the plans. 401(k) policies are tax-protected mutual funds, more or less, so when Lipper reported an 11.4 percent increase in the typical stock mutual fund, it basically meant that retirement accounts are growing by at least that much.
Lipper also found the average stock mutual fund has appreciated 124 percent since the market 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 beginning of the year.
Time magazine pointed out that the average 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 definitely varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.
Putting in money regularly
The one thing that is most important is that those who contributed the most money saw the biggest gains in their 401(k) policies, according to USA Today and Time.
If you can put just a little more money into your account each month, it will be able to make more cash in the end. It is a "snowball" effect where the snowball gets bigger as it rolls down the bill and gets more snow. The 401(k) will get bigger without putting additional money in, but it can gain more if you put extra cash in regularly.
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