Ever wondered why your 401(k) doesn't seem to really grow like you thought it would? Except of course by your own contributions that is! The chart below shows $100,000 with no additional contributions.
As shown at forecast-chart.com. It is not uncommon to see two poor performance years in a 10-year cycle. Even though the above hypothetical chart shows you effectively had an overall 80 percent collective growth, just having a 40 percent total drop brought you down to a total average annual rate of return of 3.72 percent before expenses. According to Forbes.com the average 401(k) fund expense still exceeds 1 percent annual, which comes out on the good years and the bad.
If you are nearing retirement you should really consider options with less volatility that protect you from a market downturn. Not sure where to start? Call me at 858-707-4690 or, if you prefer, email me at firstname.lastname@example.org for a free review of your options. Dow at 17,000. What's next -- UP or DOWN?