It turns out that 2008 and 2009 were some very traumatic times for those who participated in their company’s 401k programs. Along with the stock market and depending on where you had your money, your account dropped more than 50% to 70%. Your 401k as I heard a comedian tell it, had become a 201K.I had one friend who said she couldn’t take the pain of opening her quarterly statement, instead she put it in the shredder. Now that is not very good advice but it points out that we were in desperate times.
The value of a 401k is that we can save money in an account tax free until we begin to with draw it sometime in retirement. We can also take advantage of a company match than enhances our saving. The bad news is that the majority of those who have access to a 401k at work, do not even bother to invest.
So fast forward to 2015, your 401k is now an 801k as the S&P 500 is up 213% since March 9, 2009. My friend now checks her account everyday online and buys a pair of shoes when it grows more than 5% in a month. Reward is a great way to keep incentive in an investment.
Stay in it for the long term, it is not unusual that over a 20 plus year career and consistent investments, that you could fund part of your retirement through the money saved in a 401k retirement account.