Sunday, December 6, 2009

401K recovery leaves people with more money in their account than before

Posted By Pete Hill

DES MOINES — Another major provider of 401(k) accounts says the typical retirement saver now has more money in their account than they did before the stock market began tumbling two years ago.

The Vanguard Group said Wednesday that 60% of participants who continued to contribute and stayed invested have more money in their accounts than they had in September 2007 — before the market decline.

IF YOU DIDNT KEEP INVESTING? For stocks, be prepared to wait 5 years
That means 40% of continuous participants have lower balances, although Vanguard said most of them are less than 20% below their earlier peak value.

Younger workers with smaller balances caught up the quickest. Nine in 10 participants under age 25 were flat or were ahead of their balance two years ago. About eight in 10 workers in their mid-20s to mid-30s had recovered to 2007 levels. However, just half of the participants in their 50s and 60s have recovered or gained slightly while half have not.

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