General Question

trudacia's avatar

How much have you lost in your 401k?

Asked by trudacia (2508points) October 24th, 2008

Are you going to do anything about it?
Any advice?

Observing members: 0 Composing members: 0

41 Answers

Judi's avatar

I have nearly 20 years before I can take anything out so I’m not even looking at it. It would hurt to much. Now would be a great time to be putting money in though, especially if you were strictly dollar cost averaging and not panicking.

trudacia's avatar

I keep my eye on it although I’m looking at 30 years before I can touch it. I’ve lost $14,000 in the past six months!

deaddolly's avatar

Never had one; never will.

Skaggfacemutt's avatar

My son-in-law has been advising me for years to be more aggressive in my investments. I am so glad that I didn’t listen to him. Well, I did put 10% of my 401K into stocks but left 90% in guaranteed. As soon as everyone started loosing big time, I moved that 10% back into guaranteed, so I didn’t loose anything. I’ll bet my son-in-law did, but he and my daughter are far from retirement, so they should be able to make it back.

Skaggfacemutt's avatar

I do have a co-worker who lost $25,000 in the last 6 months.

Snoopy's avatar

As I have said elsewhere, I have not technically “lost” nothing as I have not sold anything. But toward the question that I am fairly certain you are asking….yes, I have lost a bit, but it hasn’t been a blowout.

I am in stuff that doesn’t swing widely and will come back before I need it….(eons from now).

If anything you should be buying. Especially if you are young.

@dd why?

MrItty's avatar

Aproximately 25% in the last 6 weeks. But then, it’s a good 30 or so years before I can touch it. So for me, this is a good thing – my semi-monthly contributions are buying up more stock, so when this financial crisis is over, I’ll be that much better off.

cooksalot's avatar

Because of the distribution that my hubby chose we ride a roller coaster of any where from 25% to 10%.

trudacia's avatar

@snoopy, I’m not necessarily talking about stocks. I’m asking about your 401k in general.

When you say I “should be buying”, do you mean I should be putting a higher percentage of my money in stocks? That doesn’t seem like a good idea to me right now….

robmandu's avatar

Scott Adams (yah, of Dilbert) has a nine point investment strategy:

1. Make a will.
2. Pay off your credit cards.
3. Get term life insurance if you have a family to support.
4. Fund your 401(k) to the maximum.
5. Fund your IRA to the maximum.
6. Buy a house if you want to live in a house and can afford it.
7. Put six months’ worth of expenses in a money market account.
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker, and never touch it until retirement.
9. If any of this confuses you, or if you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner.

He also explains, “The power of the nine items is that they are in the order in which you should do them. That doesn’t sound like a big deal, but if you are new to investing, you wouldn’t know where to start, and you’d have a hard time finding that answer anywhere else. ... The nine point list solves that problem. The other power of the list is that it excludes all of the investment concepts that you shouldn’t be messing with. Notice that there are no derivatives, or options, or anything exotic. Obviously every investor is in a different situation, and I wouldn’t expect many people to follow the nine points exactly. But I think it helps to know what the standard model looks like before you decide where to make your own exceptions.”

Snoopy's avatar

@trudacia. I think you should always be putting the maximum amount allowable into your 401K.

Most plans typically have a “core account” that is not an actual investment. Usually a money market. It probably isn’t earning alot, but you only get a certain window of time to put money in to your 401K for any given year.

I would never recommend buying individual stocks. As someone who is risk averse, they are too sensitve to market fluctuations for my taste.

So…I would put the max in (especially if you have a company match—FREE money!) and put it in your core account, at a minimum. If you are comfortable enough to tolerate more market fluctuations I would invest it in a conservative fund (funds own groups of different stocks).

Snoopy's avatar

@rob w/ regard to his point #8.

I think the “mix” really needs to depend on your age and your risk tolerance as well.
Just thought that it was worth mentioning.

trudacia's avatar

@Snoopy, thanks. Yes I am doing the max but I’m considering moving my contributions around. I think my balance is 28% mix and 72% stocks. I’m watching my money go down everyday. I know I’m not supposed to look but I can’t help it!

robmandu's avatar

@Snoopy, yah, you’re spot on there. Adams does also say, “Astute observers will point out that anyone who had a lot of money in stocks, as the model suggests, would have gotten hammered this year. That’s true, but one of the obvious exceptions to the model is that if you think you need to withdraw your money in the next five years, you should reduce your stock holdings to avoid the risk of just such a downturn.”

Snoopy's avatar

@trudacia & rob

Personally I own no individual stocks. I couldn’t handle wild swings. I would probably have a stoke.
My CFP actually has me take a risk assessment test every couple of years (read: how much are you going to freak out if you lose money).
My risk tolerance has increased slightly, but not a bunch.

So, I am not going to “hit” on a google or a microsoft…but I won’t get “bit” by an Enron, either.

I am the turtle in the turtle and the hare scenario….slow and steady wins the race.

TaoSan's avatar

Not a 401k as I own my business, but a traditional IRA, it tanked almost 48% of its value from 6 months ago.

Funny as is, the only thing that saved it from tanking worse were some Russian Economy mutual funds

scamp's avatar

2 of my co-workers have lost $10,000. I didn’t start mine because I wasn’t sure which one to choose when starting this job 5 months ago. ( I was so worried that I was behind in planning for retirement) I’m glad now that I didn’t have any money in one yet!

skord's avatar

I haven’t lost anything. I have more in it that what I’ve put in due to my employer matching to a percentage. If you’re asking how much the value of the portfolio has gone down, it’s 40%, but that really doesn’t mean a whole lot if you look at it in the big picture with contribution matching, etc.

russellsouza's avatar

If you get any match you are not very smart to not invest at least that percentage.

It is 100% return on the matched contributions. Even if it goes down 49.9% you will still have made money.

Even if you don’t get a match everyone needs to invest at least 10% of their income in retirement. I wouldn’t expect the government to cover much in our retirement.

critter1982's avatar

Lost 41% YTD. I have a lot of time left though so I am enjoying this moment in history where I can afford to buy low.

jca's avatar

i was putting in 5% (at one time i had been doing 10%) anyway, i had 54K and it went down to 37K. i have the money in aggressive and moderate funds. i know they say when it’s going to be in there a long time you shouldn’t even look at it, but i stopped contributing recently because it was killing me to see what was happening. i’ll re-start it sometime in the spring.

MrItty's avatar

so… you’re gonna stop buying while stocks are low, and you’re gonna start buying once stocks have gotten high again??

jca's avatar

i’m getting a retro check soon for a few years’ worth of salary increase, and i don’t want a large part of the retro check to go to def comp. that’s my secondary reason. i know what you’re saying.

pekenoe's avatar

I didn’t lose a dime, we had everything in guaranteed cds, not a high rate of interest, but sure looks good now. If everyone would focus a bit more on reality and common sense a lot of individuals would not have been hit as hard as they were. Greed dulls peoples sensibility and reduces intelligence substantially. Investing in the stock market is not guaranteed, everyone knows that. If you are not willing to chance losing everything, don’t put it in stocks.

trudacia's avatar

Greed? I’m just doing what I can to ensure I don’t have to work when I’m 85.

pekenoe's avatar

Why was the $14,000 in the stock market rather than in a cd?

timothykinney's avatar

My research adviser says he lost nearly $200,000, and his secretary said she lost about $70,000. Ouch.

pekenoe's avatar

Greed was too strong a word but I don’t know a softer one.

Snoopy's avatar

pekenoe Do you believe that the stock market will not come back? Ever?

pekenoe's avatar

It will come back, but I don’t believe that the economy will return to what was here for a decade or two, if then. IMO, people will perhaps learn from this and live within their means. If that happens, there will be a huge slow down of people spending on “junk”

Does not the global economy prevent any country from letting another go broke? I used to be worried about the US completely going under, not any more. If we go, China, Japan, Korea, Germany, Arabs and more will follow.

I am poised to invest in the stock market when my advisor and I feel it’s time. I bought a small amount of stock just yesterday. I have paid my dues in the market so am hoping to maybe getting back to breaking even :-) And I lost mine before the crash, so I had absolutely no reason to be there.

Me being ready to invest is probably a good reason for everyone else to stay in a safe place, that’s how good my stock picks are. But, I buy lottery tickets too, I just play all conservatively, if I lose all I have in stocks, it’ll hurt, but not cripple me.

trudacia's avatar

Im only 35. I was agressive not greedy.

critter1982's avatar

The word is Risky not greedy!! I consider greed to be more of a selfish desire for wealth without consideration for the welfare of others. Placing money in the stock market is risky. Regarding reality and common sense, investing in the stock market has historically given a rate of return between 10% and 20%. Obviously, there is a lot of fluctuation in the market but common sense would tell us if we have at least 10 years to invest, the stock market is a good place to put our money. In some peoples case CDs are a great way to go because it is guaranteed, but to say that people who place their money in the stock market are greedy, I just don’t agree with.

critter1982's avatar

Wow. Just reread my thread and I meant 10–12% not 10–20%.

pekenoe's avatar

critter: you are correct, I like Risky

Judi's avatar

You don’t loose anything until you sell it.

critter1982's avatar

great answer Judi

Snoopy's avatar

@critter1982 (cough, cough) see my first post above….

@Judi exactly.

critter1982's avatar

lol, GA Snoopy!

notabridesmaid's avatar

I work exclusively with employer sponsored retirement plans (401k’s 403B’s and 457’s) Most of the people that I have come across lost roughly 40 -45 percent of their balance in 2008 most of which would have occured in October of 08. This is a dangerous and scary situation for those indivuals who are very close to retirement. However for people who have 15, 20 , 25, 30+ years to retire, you have to be careful not to make decisions based on emotion. So many people sell their positions because of fear when they could actually make up those losses over time.

notabridesmaid's avatar

@pekenoe It is true that you should not have money invested in equities if you can’t handle watching it move up and down. However, most people that have money invested in stocks in their retirement accounts are not that way because of greed. Yes…investing money in a CD is safe but you would have to be gettting a hell of a rate in order to keep up with inflation. For example, someone who is 30 and wants to retire at 60 will watch the value of the dollar change for 30 years…..think about the price of a gallon of gas thirty years ago, or the cost of a home in your area 30 years ago. If inflation was 3% each year then the value of the dollar is cut in half in just 24 years!!!!.... So 1 mil today if not invested properly will feel like 500k 24 years from now…My point is you will not see high enough returns on your investment when they are in CD’s, savings accounts ect for your money to be worth much if it is for a LONG term savings goal such as retirement. The interest that you will make in a CD will be eaten up by inflation in most cases. While for someone with this sort of time frame (from my example) will see good years and bad, but historically (going back to 1926) will come out on top if they dont sell on emotion. Therefore investing in stocks is not always done out of greed in may cases it is out of necessity. And I am not by any means speaking negatively of CD’s they are just more of a short term investment vehicle and should probably not be used for retirement purposes, therefore not a fair comparison. The degree to which one should be invested in equities is dependent on their length of time to retirement and personal risk tolerance.
In addition I have found that a lot of the people that I meet with have no clue what they are invested in. They met some advisor at some point who picked something for them and they didn’t realize how aggressive they were until things went to crap. I think this is where we all have to be careful about being at least moderatley educated about where our money is going.

Pachy's avatar

Thousands. But I’ve been able to build a bit of it back up the last two years.

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