The Escalators and Elevators of the 401k World

The individual 401k plan is probably your biggest retirement asset but is neglected the most.

The bull market that we are currently enjoying turned eight years old last March.  That has been a good thing for your 401k account.  The bad news is that the average length of a bull market is just under 5 years.

During a bull market behaves a lot like an escalator.  It climbs slow and steady over time.

But bear markets behave a little differently.  They behave almost like an elevator.  They can almost free fall and have huge losses in short amounts of time.

If you hear things like “it’ll come back,” what you won’t hear is “it could take 4 or 5 years to get back to where you were.”  They also won’t tell you that if you lose 50% then it will take a 100% gain to get back to even.  Nobody should be ok with losing 20-30-49-57% of their money.  If you are planning on retiring in the future, look at your account balance and if in the next 5 years, are you ok with losing 20-30-40 or 50% of your balance?  They also say that these huge losses like in “2008 are once in a lifetime events.”  At the time of writing this I am 32 years of age and there have been two of these events since I have had my driver’s license.

If you need help with your 401k, 403b, 457 plans, visit our 401k employee page on our website https://paullewis.com/401k-advice-employee/

Securities and Advisory Services offered through Triad Advisors Member FINRA/SIPC.

Citations.

http://fortune.com/2017/03/09/stock-market-bull-market-longest/

https://finance.yahoo.com/

 

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