After years of stagnation, 401(k) plans are starting to earn money again, which is really good news for many people. Those looking down the barrel of retirement and those just beginning to save for it are sure to be relieved.
Do not be concerned about retirement
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 possibility of retirement.
However, numerous surveys, studies and information released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) policies or rather 401(k) accounts are starting to earn again.
Increasing by 25 percent
Lots of people have gained at least 11.4 percent or more in their 401(k) plans since they are basically tax-protected mutual funds. The average 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.
Lipper also found the typical stock mutual fund has appreciated 124 percent since the industry hit bottom in 2009. Aon Hewitt, a large handler of 401(k) accounts, recently found the typical 401(k) plan had $74,380, compared to $70,970 at the start of the year.
During the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) policies valued 28 percent, according to Time magazine.
Various states saw various increases too. The red states saw a 28 percent increase while blue states only saw 25 percent. Individuals in Arkansas only saw a 1 percent increase while those in Mississippi saw an 80 percent increase.
Huge gains for contributors
People who contributed to their 401(k) policies regularly saw the most gains, which both Time and USA Today reported to be a common thing.
The way the accounts are supposed to work is a kind of "snowball" effect. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means a little cash out of pocket per month, it's almost like making a personal loan to one's self.
Do not be concerned about retirement
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 possibility of retirement.
However, numerous surveys, studies and information released to the press recently might curb a bit of that retirement anxiety, according to USA Today. A good number of 401(k) policies or rather 401(k) accounts are starting to earn again.
Increasing by 25 percent
Lots of people have gained at least 11.4 percent or more in their 401(k) plans since they are basically tax-protected mutual funds. The average 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.
Lipper also found the typical stock mutual fund has appreciated 124 percent since the industry hit bottom in 2009. Aon Hewitt, a large handler of 401(k) accounts, recently found the typical 401(k) plan had $74,380, compared to $70,970 at the start of the year.
During the last three years, the average employer-sponsored retirement plan appreciated 25 percent, according to investment firm funds Advisor. The 401(k) policies valued 28 percent, according to Time magazine.
Various states saw various increases too. The red states saw a 28 percent increase while blue states only saw 25 percent. Individuals in Arkansas only saw a 1 percent increase while those in Mississippi saw an 80 percent increase.
Huge gains for contributors
People who contributed to their 401(k) policies regularly saw the most gains, which both Time and USA Today reported to be a common thing.
The way the accounts are supposed to work is a kind of "snowball" effect. Roll a snowball down a hill, it gets bigger. Same thing with a 401(k) or Roth or other type of retirement account; the more one contributes and continues to do so, the more it accumulates. Even though it means a little cash out of pocket per month, it's almost like making a personal loan to one's self.