401(k)s hit records as workers sock away more, stocks jump

[Omaha Steve]

Source: AP

By STAN CHOE

NEW YORK (AP) — How’s your 401(k) doing?

President Donald Trump likes to ask that question around the country, sometimes throwing out big gains like 90% or 95%. The average 401(k) did indeed hit a record last year, although its growth was considerably less than that.

The average 401(k) balance rose 17% last year to $112,300 from the end of 2018, according to a review of 17.3 million accounts by Fidelity Investments. The average individual retirement account, or IRA, balance rose the same percentage to $115,400.

Surging markets around the world were a big reason for the growth: The S&P 500 index had one of its best years in decades with a 31.5% return. Investments of all types logged gains, from junk bonds to stocks from developing economies.



FILE - In this April 23, 2018, file photo, the logo for General Motors appears above a trading post on the floor of the New York Stock Exchange. Despite a 40-day strike by factory workers and slumping sales in the U.S. and China, General Motors still made money in 2019. The company posted a $6.58 billion profit for the year, but that was down almost 17% from 2018. (AP Photo/Richard Drew, File)


Read more: https://apnews.com/cb3b48253eba90b97d96848b0e11bf42

[maxrandb]

1. 401k's Averaged a 37.65% gain under President Obama

This is such bullshit. It took me 5 seconds to Google a comparison of 401k gains under Obama and Donnie Shit for Brains.

I'm sure "journalist" could do the same.

This is a bullshit, one sided head up Donnie's "looks like 50 lbs of chewed bubblegum" ass propaganda piece.


https://401kspecialistmag-com.cdn.ampproject.org/v/s/401kspecialistmag.com/how-trumps-401k-performance-compares-to-presidential-predecessors/amp/?amp_js_v=a2&_gsa=1&usqp=mq331AQCKAE%3D#aoh=15816054158482&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2F401kspecialistmag.com%2Fhow-trumps-401k-performance-compares-to-presidential-predecessors%2F

[ZenDem]

3. Interesting article.

I don't know shit about what they're talking about, but the Historical Analysis should be included in every ad in every red state...forever.

Clinton’s second term S&P performance was an eyepopping 71.7%, according to Yahoo, and while it was beaten by Reagan’s 92.2% second-term rise, Democrats still beat Republicans overall 36% to 17.7%.

[jayschool2013]

2. According to the U.S. Census Bureau

From the Motley Fool:
"According to data from the U.S. Census Bureau, only 32% of Americans are saving for retirement in a 401(k). Granted, that owes partly to the fact that 401(k)s are employer-dependent, and not every company offers one."

[earthside]

6. 401K is mostly an illusion

Even 75% of Americans in the best 401(k) plans won’t have enough to retire
[link:https://www.marketwatch.com/story/even-75-of-americans-in-the-best-401k-plans-wont-have-enough-to-retire-2019-04-18|

[csziggy]

13. Yes, if the average value is $117,000, that is nowhere near enough to live on

Returns on investments are pretty low, maybe 5% (? not really sure right now) so that $117,000 would make $5850. OK, maybe you'd get Social Security also, but some are thinking that IRAs will replace SS as times go by. You'd end up having to dip into principal more and more as time goes by, reducing the income more and more.

In order to live well, you need at least ten times that average value, or a million dollars - and if inflation hits, much more.

[Aussie105]

22. Those are piddling little numbers.

I'm on an Australian forum and often discuss Superannuation - the equivalent of the US 401(k).

Most of the younger people posting there are looking forward to retiring at pensionable age with $1 M or more in their accounts.

[csziggy]

23. Yes - most Americans have no clue how much is really needed to retire

I jsut wish more young people had been educated in economics so they could start saving early in their careers.

Unfortunately, too many Americans earn so little they can't buy the basics now and they can't possibly save for the future.

[MichMan]

26. That would include people of all ages

The average balance in a retirement plan is across all age groups, not just those of retirement age.

[rownesheck]

30. Truth.

You would have to land an extremely high paying job in your early 20s, live a near homeless existence until you retire so that you could pump the recommended percentage into your 401k, and hope to god the markets don't tank before then. Otherwise, you ain't gonna have enough to retire.

[MichMan]

31. Not true.

None of those statements were applicable in our case.

1) I didnt graduate from college until I was 30 and my spouse has no education past HS

2) Still living in our first starter home in an affordable area

3) No children

4) Still managed to do the things we enjoy doing

5) Contributed around 6% into 401k with matching most years, but nor all depending on the job. Didnt panic in 2009 and left everything intact in 401k even when I was unemployed for a year.

Ready to retire in another year or so

[iluvtennis]

7. Thanks for the statistics on % of Americans with 401k plans. I knew it was in the minority. And

you're right that not every company offers a plan and even those that do, not everyone takes advantage of them. When I was a manager I used to have to preach to my young employees to invest in the 401K and take advantage of the 3% matching that our company offered them. When I put it in the terms of them (the 20-somethings) leaving free money on the table (the 3% matching) and that no way would they miss a 3% deduction from their paycheck, they would then enroll in the plan.

[IronLionZion]

4. GOP will cut social security to screw workers who don't have 401K

This stock market is an artificially propped up house of cards just waiting to tumble down. They're hoping the next president will have to fix it just like Bush did to Obama.

If things are so good, why do we need Fed stimulus and rate cuts?

[safeinOhio]

9. That's what I've been thinking.

No 409K here, I buy individual stocks. Been selling the more riskier ones for a couple of months.

Buy low, Sell high. It's simple.

I wish em luck. Those stock gains came from companies taking those tax cuts and buying back their own stocks. A house of cards is correct.

[IronLionZion]

10. If you can afford stocks, there are tax benefits to having it in a retirement plan

over the past year or so as the market hits all time highs, I trim a little bit and keep it in money market or bonds. I have a feeling there will be a bear market coming no matter who wins the election. GOP is already promising that Dems will ruin everything if we win.

[safeinOhio]

11. I've been retired for 18 years.

My goal now is to have the last check I write bounce.

[DownriverDem]

5. Get ready

Folks who will vote on the economy, will be hurt if trump wins a second term. trump has a lot of tricks he's using to fool folks. I have never just voted the economy, but there are a lot of folks who do.

[not_the_one]

16. The turd had one trick, the trillion $ tax reduction for the uber rich.

He isn't smart enough to remove the toilet paper from his shoe on exiting the outhouse.

He gave the money to the rich, they are causing the wall street inflation. He just points to that Wall Street inflation to show all the rest of us NON stock owners how GOOD we are doing...



Then there are states like Louisiana. The state of Louisiana DOES NOT TAKE OUT SOCIAL SECURITY, you MUST contribute to a 401K.

[moose65]

19. That's not really true

If you’re a state employee in Louisiana, you’re probably not covered by Social Security but by a state pension system. Other workers in Louisiana pay into Social Security, though.

[not_the_one]

20. I said state of Louisiana. I worked for the state of Louisiana

and I did not have an option. They will not withhold social security. The state pension is a retirement account. They value went up, and then down. I lost a lot.

When I moved to NYC (where SS IS taken out) I chose to only contribute to a guaranteed fund, with matching funds from my employer. I knew it wouldn't match the stock market, but I also knew it wouldn't go down as much as the stock market. I didn't worry too much about it.

The point is, Social Security will be there when you need it. A pension? Maybe, or maybe not. But you can be damn sure that Wall Street got their cut.

[C Moon]

8. I had a good amount of money in a 401(k) before the Bush/Cheney collapse.

It was annihilated. I suppose the same will happen soon. So, I have no interest in doing that again.

[Python boot]

12. National debt

Corporate investment gains resulted primarily from the severe lowering of corporate tax rates which in turn results in more borrowing.
When President Carter left office the United States was not a borrower nation it was a lender. Reagan tax cuts for the rich made us a debtor nation. Now with the latest round of tax breaks for the rich the national debt is more than the gross national product. I notice retail prices increasing rapidly, most likely due to the trade war but also due to the demand for borrowing hurting the purchasing power of the currency.

[marble falls]

14. Getting workers to invest in a rigged game. Brilliant.

[ck4829]

27. Yep

[Yavin4]

15. Thank the Fed. They pushed savers into stocks.

You cannot get a decent return on savings. Haven't been able to do so since 2008. So, in order to get any sort of decent return, you have to buy stocks or other assets.

The downside is that prices for everything else keep escalating.

[Midnight Writer]

18. Doesn't the 401(k) hit new records all the time? It is an investment designed to grow.

[nitpicker]

28. It depends on what the 401K (or equivalents such as TSP) is invested in

In the TSP, the G fund is "invested in government funds" and grows (nominally) all the time.

However, the stocks funds can swing wildly.

The TSP's C fund mirrors the S&P 500 index. Wikipedia said it went from 1565 on 9 Oct 2007 to 676 on 9 Mar 2009.

More recently, the S&P hit a low of 1864 on 12 Feb 2016. By 13 Jan 2017, it had risen to 2274.

((Since then, the gift of the corporate tax cut helped boost the S&P up around 50%. But what of the working stiffs?))

[Abnredleg]

29. The key is asset allocation

Go heavy in equities while young (I was 90%) because you can recover from a recession, and shift more to bonds as you get older to lower risk. I'm 60, will retire in three months, and my allocation is 55% equities/40% bonds and 5% cash (money market fund).

I shifted most of my retirement funds to target date funds since they will automatically reallocate as you age.

[Aussie105]

21. Just one question . . . or two . . . .

If your 401(k) and shares are doing well, and it's all down to Trump . . . just a question or two:

1. When was the last time a political leader claimed he could directly influence a country's economy and the share market?
(Answer: No one ever. It's just not true. It's a stupid thing to say, it's a stupid thing to believe.)

2. I'm in Australia. Stock markets and the equivalent of my 401(k) have risen a lot too. How does Trump influence the economy and stock markets in Australia?
(Answer: he can't, he doesn't.)

3. When there is a downward correction, where is Trump's admission of responsibility for that?
(Answer: Not his fault, he will deny it, he will say he hardly knows the thing.)

In short, the stock markets, the economy are complex beasts. No one person can steer it as clearly as Trump says he can.

[Linda Ed]

24. drumpf come out Monday declaring economy is in "serious trouble"

Trump is hoping voters don’t notice he just officially declared the economy is in ‘serious’ trouble
Trump usually insists the US economy has been “strong” on his watch—even though U.S. manufacturing is in recession, the debt is soaring, and wage growth has been slow.

But on Monday, Trump publicly declared we are in the midst of “national emergency or serious economic conditions affecting the general welfare.”

Why would he assert he has been disastrous steward of the economy? To justify slashing an already minuscule pay raise for millions of civilian federal workers.

So Trump’s declaration is purely cynical. He wants to screw over federal workers—while hoping voters don’t notice he just officially declared the economy is either in “serious” trouble or an actual “emergency.”

So we can expect that he will just keep pushing on Twitter what he officially says is lie—that the economy is doing great. https://www.frontpagelive.com/2020/02/13/trumps-cutting-pay-for-millions-because-of-serious-economic-conditions/

[nitpicker]

25. I can't tell yet with my TSP

Started getting a little worried yesterday, so called them yesterday.

Turns out they finished February annual statement mailings that day.

So something else to read in bed.