401k returns nothing, so how to save for retirement.

Posted in the 401K Forum

jpercos

Lake Zurich, IL

#1 Jul 23, 2011
You know all those retirement calculators use some average rate of return around 6-8% over the long run. In the late 90's they assumed 10%.

Yet I've been investing in my 401K for about 12 years and pretty much have only what I put in, meaning I'm averaging close to nothing. I'm a third of the way through my career and don't see any way possible to grow my retirement money.

Nothing but doom and gloom on the horizon.
I've never worked for a company that gives a pension.
I'll probably get limited Social security, and they plan to raise the age for eligibility.
I'm also likely not to have a job later in my career due to layoffs for 50+ people, then its hard to find a job due to age discrimination. There are many reasons 50+ age group don't find jobs, but one reason people don't discuss much is many small/mid company's won't hire many mature workers over 50 since they are more likely to have health problems and drive up health costs.
Yet we are told to plan on working until we are 70, but that doesn't seem possible for most.

And all the retirement calculators assume the market will keep going up and it has not. I mean 2009 ended the worst financial decade in history. Then 2010 ended the worst 11 consecutive years in stock market history. Now instead of rebounding, I think we will have the worst 12 years ending 2011.

I'll need another lifetime to make up for all that, and even if I got it, I still probably couldn't make up for it.

What do you guys think about all that? Don't you feel absolutely hopeless for your financial future?

“Tesla”

Since: Jul 11

Los Altos Hills, CA

#2 Jul 23, 2011
Should have worked for a company that matches your 401k.
jpercos

Lake Zurich, IL

#3 Jul 24, 2011
Dr Moonshine wrote:
Should have worked for a company that matches your 401k.
most of those 12 years, I did work for a company that matched a max 3% of your salary. Not since 2008 though because of the bad times again.
Anyway, I consider that match what goes gets invested. That match I got back in 1999 has made less than 1% per year for 12 years.
So that is how you grow your money to beat inflation. An employer match???

“Tesla”

Since: Jul 11

Los Altos Hills, CA

#4 Jul 24, 2011
By maxing out your employer's match, stock options, and a savings account. I'm halfway to a million at 30.
jpercos

Lake Zurich, IL

#5 Jul 25, 2011
Dr Moonshine wrote:
By maxing out your employer's match, stock options, and a savings account. I'm halfway to a million at 30.
Wow, that's really good. You must make a awful lot. I got stock options 10 years ago, and they never made it above water so I lost them.
Since stock market has returned anything since you were a teenager, you must make so much that you just saved half a million. That about right.
I invested about 16K a year for 12 years but didn't make any return on that investment, so it is still just my contributions and company match.

“Tesla”

Since: Jul 11

Los Altos Hills, CA

#6 Jul 25, 2011
jpercos wrote:
<quoted text>
Wow, that's really good. You must make a awful lot. I got stock options 10 years ago, and they never made it above water so I lost them.
Since stock market has returned anything since you were a teenager, you must make so much that you just saved half a million. That about right.
I invested about 16K a year for 12 years but didn't make any return on that investment, so it is still just my contributions and company match.
I currently make 6 figure. But even before then while working at Home Depot during college, I would put 200 dollars into my savings account every payday. I used the extra financial aid and scholarships I had left over to buy stock options. A huge portion of my current stock portfolio consists of raw materials. If your employer give you public stock, sell them. The whole idea is to diversify if you invest in stocks. I drive a Toyota Prius while my co-workers drive Audis and Bentleys. I own a high-end 2 bedroom condo that's located in an advancing city which I plan to sell for at least twice of how much I bought it for.

People can beat inflation by saving a lot and saving early.
Adam

United States

#7 Aug 1, 2011
In your 401k sometimes you just get shit luck. Every employer has their own list of what you can invest in, so having no idea what your options are, you may just be in a shitty retirement plan.
On the other hand, you may just be in the wrong investments. There is always money to be made even when markets are down overall. Either by contributing more to pick it up at a low and wait for a future high, or by taking more time to study the investment choices you have in your 401k.
So either your choices are shitty and you should consider other types of accounts to save, or you are choosing shitty funds and need to get personalized, professional help (more than can be offered on a message board unfortunately) or just take time and patience to learn on your own.
As well we don't know what you currently make per year or what you are contributing to the accounts. Most people fret too much on WHAT to invest in instead of just SAVING MORE. A high contribution rate and an index fund can do well in the long run with just a little help on when to get out so you don't get burned right before you retire (think people retiring from 2000 to 2020 who made wrong moves and lost most if not all during Enron/dotcom bust and 2008 crash). This comes from ,so far, 8 years of working with other people's money.
Money Master

Fort Worth, TX

#8 Aug 18, 2011
jpercos wrote:
<quoted text>
most of those 12 years, I did work for a company that matched a max 3% of your salary. Not since 2008 though because of the bad times again.
Anyway, I consider that match what goes gets invested. That match I got back in 1999 has made less than 1% per year for 12 years.
So that is how you grow your money to beat inflation. An employer match???
So is your old 401k from the company that matched 3% still with that company? Or did you roll it over to the new company? If you haven't rolled it over I have a solution that will help you increase your returns..
Mary

Franklin, MA

#9 Sep 9, 2011
401K works mostly for those manage them. they make big money. In today's economy, people should invest more on something that has really value, like gold and silver.

Mary @ rarecoinslist.com
mary

Brighton, MI

#11 Oct 21, 2011
401KGPS.com is a great new service to help you with your 401K allocations based on a personalized risk profile - It is a great way to take the guesswork out of 401k retirement planning. Super affordable, does all the research for you - to profit it up markets and protect your investments in downturns - Check it out!
FundOptics

San Ramon, CA

#12 Mar 8, 2012
There is a reason that they call it "the lost decade"! Buying and holding to the same funds in your 401K just doesn't pay off. Active management of your account can significantly increase your returns. Check out FundOptics.com . It gives you BUY and SELL signals for the funds in your portfolio, so you know when to move from one fund to another (or to your cash/money market fund), all with the risk tolerance that you choose.

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