If you're one of the millions who lost part of your 401k savings in 2008, you probably don't need any expert to tell just how bad it was; however, times are getting better. According to recent information released by the Employee Benefit Research Institute and the Investment Company Institute, many investors have been able to recoup what they lost.
The reason times are getting better is because the S&P 500 has been on a pretty steady incline in the past few months. Additionally, investors have continued making contributions to their 401ks despite the financial crisis that hit them hard last year.
But these better times don't shadow the devastation that occurred last year - or even earlier this year. In 2008, the average 401k balance fell 24.3 percent. And in March 2009, stocks hit a 12-year low, meaning that 401k investors lost even more money.
So while for some individuals, recouping the money they lost has been pretty easy (i.e. many 35 to 44-year-olds who have worked for the same company between five and nine years have gained back or increased their accounts), others haven't had the same type of luck. For instance, those closer to retirement in the 55-64 age group with more than 20 years of tenure are averaging accounts down 7.5 percent from the start of 2008.
No matter what direction your account is moving, experts insist that you not withdraw funds and instead continue to contribute. Since we see that it is possible for accounts to bounce back, they say it's better to just wait out the market as long as you can.
Was your 401k heavily affected by the 2008 financial crisis? Has your account recovered?
