401K Savings Up – Nice Work!
Posted on May 16, 2011 13 Comments
Congratulations guys and gals! According to the USA Today, “At the end of the first quarter, the average 401(k) balance hit $74,900, a 12% jump from a year ago. That marks the highest level since Fidelity started tracking account balances at the end of 1998.” (Get the entire article here.)
Natch, there’s still room for improvement … The USA Today article says most people are saving about three percent when they should be saving about 10. But a bump in savings is always nice to see.
Does 10 percent seem high to you? Well, here’s one way to get there. If you’re saving three percent now, increase your savings next month to four percent. See if you notice a difference. If you can live with the change, wait another month and then raise it to five percent. Repeat this as long as you can. This slow and steady approach was the technique I used to increase my contribution from three percent to 10 percent, and you know what? I didn’t even notice the difference.
As for my savings, my 401K is doing better than it was in 2008, when it lost 40 percent of its value in one year. It’s nice to see it growing month after month now that I’ve FINALLY rolled everything over and set up my contributions correctly following January’s system error mess.
How is your 401K doing? I’d love to hear from you about it. Let me know!
Category: Media
Tags: Retirement
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13 Responses to “401K Savings Up – Nice Work!”
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May 16th, 2011 @ 12:20 pm
I’m a little in love with my 401k, I’m not ashamed to admit — it’s one of the few things I’ve gotten really right since I started working.
And especially since the stock market started playing nice, looking at the balance just makes me all warm and fuzzy inside. Heh.
May 16th, 2011 @ 2:02 pm
I am afraid to comment on this blog
May 16th, 2011 @ 2:18 pm
Self-employed. No 401(k).
The economy has really hit us hard these past few years — saving ANYTHING has been about impossible.
However, we’re in a good spot compared to others because we’ve got no debt, just basic living expenses.
May 16th, 2011 @ 8:24 pm
Oh no guys, I’m sorry to hear that! Do you have a Roth IRA or any kind of retirement plan?
May 17th, 2011 @ 12:46 pm
I have no idea why I have this unhealthy attitude towards retirement. Maybe because I do not see it as something that will happen to me any time soon, I’ve done everything else right no debt, frugal lifestyle etc. but retirement savings I have a hard time doing something (read anything) about.
Nicole how do you motivate your self to contribute and grow your retirement savings?
PS I work for a financial retirement planner. ??? Go figure!
May 17th, 2011 @ 2:22 pm
Tanja, you’re making me think of that old saying “The cobbler’s wife has no shoes.”
We’re not totally bereft of retirement resources — I took the inheritance (not huge, but not trifling, either) from my late father and have invested it in money markets. While we’ve dipped into it for a few things, we’ve left most of it invested (which, of course, has been a losing investment, along with most other folks’ investments, but we’re just leaving it be as much as we can and awaiting when the market swings back up).
The way my hubby and I handled the inheritance from my late father is in TOTAL and COMPLETE contrast to how my older half-brother handled his: he blew all of it (he always thought Daddy was loaded with money — he wasn’t — and he was sure there was more money in the estate to come his way — once again, there wasn’t), and within a year or so, he called me (when I hadn’t heard from him in YEARS) to ask for $$…and I refused to loan him any. Last I heard, he was living in a homeless shelter.
Economy’s rough all over right now. Being self-employed, we’re used to a certain amount of ups and downs, and this has been the toughest patch we’ve weathered yet.
May 17th, 2011 @ 4:08 pm
Missie … shoes I have
but no IRA. Ok I did have 401K but there was not much in it. It was left over from my old job years ago and I have not done a thing with it, but rolled it over to IRA and now it’s sitting there doing nothing. I have enough for free IRA so at least there are no fees.
May 17th, 2011 @ 11:11 pm
The only way to try and steer your life to retirement (earlier rather than later) is to start saving early and make hard choices to contribute as much as possible. I cut out a lot of things that people take for granted as “needs” in order to feed my future life of not working more than what I want to.
For the vast majority of us who are the marginal middle-class, I see this as a choice that requires dedication. It would be all too easy to blow it off and say… “I may never be able to retire”, but that is the lazy way out. We can’t rely on winning a lottery, finding a windfall inheritance or insurance payout, invent the next Google etc. as these are fluke events.
Once you make the choice to save, then comes the difficult task of figuring out where to place the money to earn enough in returns to make a difference and pay out in a tax-friendly manner when you retire. Money-market funds and CD’s rarely offer significant growth let alone keep pace with inflation. Balancing long-term investment (real estate) with growth stocks or reinvesting dividends etc. and having more liquid assets can be daunting.
Suze Orman, Jonathan Pond, Dave Ramsey and many others offer sage advice to help us along the way. I wake up Saturday mornings listening to Marketplace Money on public radio
May 18th, 2011 @ 1:37 am
I beg pardon. I typed “money market,” but meant “mutual funds.”
There is a great difference between the two, but for some reason, I often confuse the terms in speaking/writing. *shrug*
Nubby and I are VERY thrifty and are excellent savers, but we have to have the $$ coming in to be able to save.
May 18th, 2011 @ 1:38 am
LOL, “Nubby” = “Hubby.”
Another typo
May 18th, 2011 @ 3:20 pm
Tanja, I don’t have to motivate myself to do it at this point, everything is automatic so I never see the 10% of my paycheck that goes to my retirement every month. All you need to do to get motivated is set up an account, type in a percentage, then forget about it! But, I do get super super pumped when I login to see my nest egg every now and again. I sometimes don’t even believe the account is real because I’ve never actually seen the money. But watching my net worth grow is motivation enough for me.
I got started mostly by peer pressure. All my co-workers my same age were contributing and informed me that by not contributing I was losing FREE MONEY. You know there was no way in hell I was missing out on that!
May 18th, 2011 @ 3:21 pm
Missie: Nubby, hahahahahaha!
May 18th, 2011 @ 10:23 pm
Well, sometimes he wears a nubby sweater or jacket
*LOL*