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fidelity had released a study a few years back that was quite interesting.
during the lost decade when gains were hard to come by the average account balance for those over age 55 that contributed from 1/2 max to max saw the average account balance jump from 96k to 211k over that decade.
2/3's 's of the gains were employee and employer contributions.
only 1/3 of that amount was gains since markets were slugglish.
that is the power of 401k investing despite the bull some like to spread.
Last edited by mathjak107; 12-21-2013 at 06:56 AM..
I like how financial advisor Michelle Singletary quotes her grandma, "Big Mama," who used to say:
"If it's on your a$$, it's not an asset." Too many people simply acquire what they cannot afford. The fact that today's fed policy is making it easier to borrow and less lucrative to save doesn't help those who are less responsible, either.
to save does not mean take all your money and bet the ranch on cash instruments. historically after inflation and taxes that has been a loss regardless more often than not..
anyone who has long term savings and needs to protect against inflation and periods of negative real returns needs more than cash instruments.
if they did that then the little bit they gave up compared to how bonds , reits,and equities did is a non event.
you can't take someones lack of planning, paying attention to their finances and lack of interest in learning even the basics and blame every thing and everyone around them because they did the wrong thing.
just about anyone who with a home who refinanced over the last couple of years or bought a car is well ahead of the game.
the fact is most americans have very little in the bank other than what comes in and goes out to pay bills. there is nothing there to even be concerned about interest on as there is nothing in the account long enough. they may be far better served by low rates as they my count on credit cards alot .
low rates and lower inflation go hand in hand. higher inflation to get higher rates would only hurt them more.
most americans can't even come up with 10k in emergency funds. their rolling balances are very very low so interest really is tiny. an up tick in inflation would well exceed even a 5% interest rate on their balances.
Last edited by mathjak107; 12-21-2013 at 09:47 AM..
Fidelity Investments -- the nation's largest 401k provider -- revealed in November that the average balance hit an all-time high of $84,300 at the end of the third quarter. For investors that are "pre-retirees" age 55 or older, balances hit the high-water mark of $255,000 at the end of 2013's first quarter
. The article and the Fidelity web site all refer to 401 accounts and there is no mention of 403 accounts. I did a search and couldn't find Fidelity data for 403B accounts. So assuming they are lumped together we have to wonder how many of the account holders also have pensions? How many of the account holders are married to each other with the couples having two accounts? So the picture may be better for some than the numbers might suggest and on average worse for more. We know from multiple forums, threads etc there are any number of couples with multiple pensions, SS and individual retirement accounts that any one data point says very little about their retirement finances.
why would you save for anything when you have been programmed for the last 50 years to believe that debt is meaningless?
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paycheck to paycheck
