QI have been working at the same company for 20 years and have contributed to my company-sponsored 401(k) retirement plan the whole time.
A recent retirement plan statement I received shows the total employee and employer contributions as well as the current total value (roughly $200,000).
I was surprised to see that the total value was 5 percent less than the contributions. It seems to me that I could have done better using a savings account.
Given my information, are these numbers normal for most people saving for retirement?
FRUSTRATED RETIREMENT INVESTOR
ASad to say, your experience is typical. The sorry performance largely reflects the economic and financial trauma of the past several years.
For example, the average annual return on stocks from 2000 to 2010 is negative 0.95 percent, according to Ibbotson Associates, a Morningstar company. However, cushioning the financial blow somewhat over the past decade for diversified savers is the 7.69 percent return on long-term U.S. Treasuries.
The uncertainty about future performance is built into the 401(k) retirement savings plan.