More Funds Accumulating In 401(K) Plans

With all the not so great news going around these days, people who have 401(k) plans have some good news. Earnings on 401(k) policies have been sneaking up over the past year according to press releases from various outlets.

Retirement anxiety all over

When the economy tanked, so did most 401(k) accounts invested mostly in stock. That meant a lot of retirees and soon-to-be retirees were really struggling for a few years. Now, “Generation Y” is really negative about the chance of retirement.

USA Today pointed out that lots of people are beginning to stress less about retirement as their 401(k) plans and accounts are starting to rebound and earn cash again. It is pretty exciting for a number of people.

Going up by 25 percent

A number of people have gained at least 11.4 percent or more in their 401(k) policies since they are basically tax-protected mutual funds. The typical stock mutual fund increased 11.4 percent in the last year, according to Lipper reports. There are a lot of different numbers being reported, but they are all positive, according to USA Today.

The average 401(k) plan had $74,380 in it, according to Aon Hewitt. That is good news since it was $70,970 at the start of the year. The average stock mutual fund increased 124 percent since 2009, according to Lipper, which is also great.

During the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) plans valued 28 percent, according to Time magazine.

There was an 80 percent increase seen in Mississippi and 1 percent in Arkansas, so it certainly varied a lot by states. Blue states saw 25 percent increases while red states saw 28 percent increases.

Putting in money regularly

People who contributed to their 401(k) plans regularly saw the most gains, which both Time and USA Today reported to be a common thing.

If you can put a little more cash into your account each month, it will be able to make more cash in the end. It is a “snowball” impact where the snowball gets bigger as it rolls down the bill and gets more snow. The 401(k) will get bigger without putting additional cash in, but it can gain more if you put extra cash in regularly.

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