So let's hear it: How bad did your 401K drop this year?

Not entirely related to the topic, but I had a question for anyone out there who cares to answer. I recently graduated from school, got a job with the gov't, and started investing in their thrift savings plan (from what I undertand, similar to 401k). Anybody invested similarly who would care to weigh in on how they've done in the last year, and which fund you're in?

Indy Guy wrote:

Somewhere I read or was told that you should contribute:

1. 401k up to your employer's match

2. Roth IRA up to the annual max allowable

3. 401k up to your annual max allowable

Can someone either explain or point me to a website that explains the benefit here?

N

1 is most important because you should never turn your back on free money, period. 2 is likely the next most important because you should in theory be better off in the long run with a Roth with all else being equal - many say this is because you should expect to be in a higher tax bracket later on, but I read an article in Money a few months ago that ran the math and showed you would still come out ahead even if your tax bracket at retirement is the same as it is today. If you can still contribute after 1 and 2 you should do 3 because of the upfront tax break and tax deferred gains.

Down 2.8% for 2008. Wish I could say the same for all of my investments.

ALL GONE!

but it's ok. I only started contributing 2years ago. and I am young and I got 70 years before I retire. Where I'll take my worthless dolor and celebrate the 2days between retirement and death.

money lost wrote:

dolor

Dolor= spanish for pain I ment dolar. but it'll feel the same.

Eyegore wrote:

Not entirely related to the topic, but I had a question for anyone out there who cares to answer. I recently graduated from school, got a job with the gov't, and started investing in their thrift savings plan (from what I undertand, similar to 401k). Anybody invested similarly who would care to weigh in on how they've done in the last year, and which fund you're in?

I graduated from college in 2007. I invest 15% of my income (with an additional 3.5% employer match). My overall investments (employer match + my contributions) are down about 21%. The fund I invest in is down more, but because I am so young my cost basis has been gradually falling as I keep investing.

Indy Guy wrote:

Down 35%.

Question - My employer automatically contributes 5% and then matches my first 5% dollar for dollar. For the past few years, I've been putting 13% in, so my total contributions are 5% auto, 5% match and 13% my contribution for a total of 23%.

Somewhere I read or was told that you should contribute:

1. 401k up to your employer's match

2. Roth IRA up to the annual max allowable

3. 401k up to your annual max allowable

Can someone either explain or point me to a website that explains the benefit here?

N

Read this -

The reasoning is that basically the Roth IRA is better than a traditional 401k, but you can't pass up the employer match, so you do the 401k first to the match then to the Roth IRA and then if you've got more to invest, back to the 401k. If your 401k is a ROTH 401k then you might just stick with that although for diversification's sake, you might want to pick a separate administrator for the Roth IRA and divvy up your money that way.

ehhhh wrote:

I am actually in a very enviable position. I just opened my 401K around end of spring because I had already seen the market start to tumble. I then just did the company match and have a year to date return of +4.8% because I put it all in bonds. It isn't the largest 401K ever (it is actually very small) but I am 23 years old and can't wait to flip it over to a more equity friendly (risky) set of funds when the market finally starts showing the upward trend. Like I said, I feel like I am in a very enviable position because I missed the fall out and get to start brand new with the DOW at 8,000.

I'm also in a similar position, though not as enviable as you.

I still lost money, but I was laid off in Dec 2007 and had to switch my account to a rollover. 90% of it turned into straight cash, which I didn't know until just recently, because the portfolios offered at my old company weren't offered by Fidelity. Anyways, so 90% of my portfolio has gone unchanged. The other 10% or so has gone down about 30% since I put my stuff in fairly aggressive funds because I'm only 23.

Christ.....i hope intelligent people have actually read this post with disgust....

.........but it seems most LETSRUN posts are by high school guys.........

SO!............to all of them!!......enjoy the lower middle class.....

Did you mean my post in particular or the original post?

I'm not quite sure what you mean, I simply lucked out by not checking my 401k more than every 3 months. I actually still have it in cash just in case.

As for enjoying the lower middle class, class is a judged by ranking in society, so someone will have to be middle class, and someone will have to be upper middle class.

One from an old job dropped from $101,100 to $69,500. So a solid 30% drop, but dropping well below 6-figures is the sadder thing.

Mine was -78% in mid-November. At that point I didn't really care anymore, I'm 28 and have 25-30 yrs to go yet. So I threw it all in my company's stock, which was at a historic low. It proved to be a good thing as they shot up the next couple weeks. When the year ended, I finished at -36%. Still negative. My lesson learned was DON'T PLAY WITH YOUR 401K!!!

The market is impossible to time. I've learned my lesson and read some good books on investing. Everyone preaches a more passive management.

Save it. wrote:

Mine was -78% in mid-November. At that point I didn't really care anymore, I'm 28 and have 25-30 yrs to go yet. So I threw it all in my company's stock, which was at a historic low. It proved to be a good thing as they shot up the next couple weeks. When the year ended, I finished at -36%. Still negative. My lesson learned was DON'T PLAY WITH YOUR 401K!!!

The market is impossible to time. I've learned my lesson and read some good books on investing. Everyone preaches a more passive management.

I'm not sure I get what your saying. Do you still have it all in your company stock? Probably not a good idea, just ask ex-Enron or Bear Stearns employees.

My 401K got crushed too, I contribute 5% and my company matches 5%. Of that I put 30% in money market and the other 70% in equity funds. I've always been a "long-term" equity investor, not even looking at day-to-day activity. However, recent conditions have proved there is no guarantee that the S&P will be higher when I retire, even though it is 30 years away.

Flagpole has a lot of nerve coming here AGAIN AND AGAIN, ad nauseum, selling his stock market snake oil. You are a fraud, Flagpole. You and your dollar cost averaging BS can go the way of the dinosaur.

DON'T LISTEN TO THIS FRAUD. HE WILL COST YOU DEARLY. HE IS A CHARLATAN. IF I HAD A DOLLAR FOR THE AMOUNT OF TIMES HE AND HIS MONEY MANAGING ILK HAVE BEEN PROVEN WRONG I'D BE A BILLIONAIRE.

(Please excuse the editing down of posts)Doesn't the assertion that a Roth IRA is a better than a traditional IRA (because future tax rates are projected to increase and/or you will have fewer deductions when you retire) assume that your income requirements will be the same in retirement as they are now? I hope not to have a mortgage or student loan payments when I retire, which currently eat up a large chunk of my income. Now I understand that the interest on these loans is tax deductible, but my income requirements should drop more than my marginal tax reductions, right?Also, this assertion assumes that one is not cash-poor. Right now, the reduction in taxable income that I can get through a 401(K) or an IRA is worth a lot to me because it frees up some relatively precious discretionary income (through reduction in taxes that I have to pay). I can't say for sure that I'll be living it up in retirement, but again I would hope that I have less debt and therefore comparable levels of discretionary income for lower levels of overall income.Am I missing something?

Flagpole wrote:

Indy Guy wrote:

Somewhere I read or was told that you should contribute:

1. 401k up to your employer's match

2. Roth IRA up to the annual max allowable

3. 401k up to your annual max allowable

Read this -

http://www.schwab.com/public/schwab/research_strategies/market_insight/retirement_strategies/planning/saving_for_retirement_ira_vs_401k.html

-37.4% for 2008

I've always just watched it slowly climb, and never really realized how bad the economy can hit some peon like me. Makes me reconsider how I'll invest in the future.

Flagpole wrote:

Got to remember that I'm not one to time markets. I believe solely because he's 23 years old that he needs to switch to stocks; 23-year-olds don't need a position in bonds. I couldn't care less really this far out for him if we're at a bottom or not. Long term (and that's how he should look at it), stocks SHOULD greatly out perform bonds. Look at safer investments when within 10 years of retirement and then within 5 years make them even safer. Other than that, stocks (within mutual funds or 401ks or Roth IRAs) are the way to go. Personally I wouldn't dabble in individual stock picking unless I owned my house outright and was already doing the max toward 401k and Roth IRA.

I've got to disagree. I'm 27, and I re-evaluate where my 401k every 6 months (not what it's being invested into). I use factors like forward-looking economic predictions, losses/gains the previous 6 months in my 401k, what sectors I'm sitting in, etc., and I re-juggle things a bit. Not my *entire* portfolio, but usuallly 30-40%. Back in January 08, I moved to 30% bonds. In June, I moved to ~50% bonds. This January, I will probably move down to 25-35% bonds again and probably back to about the normal 15% or so bonds in June depending on what happens in the next several months. Will I miss out on gains in the next six months? Probably 5-7% is my guess. But my losses would have been about 2x without some adjusting, and that 5-7% against 2x won't really mean much.

I don't switch it every day, and my contributions continue about an 85/15 stock/bond mix, but I would argue I will outperform the market by taking time every six months and not being afraid to reevaluate and readjust my positions for certain periods of time. I think it is perfectly defensible for a young persond to be more heavily in bonds from time to time - just a long as it is not permanent.

I was aiming for 2000k this year. Got injured and quit running to let it heal. didn't even get to 600k. So I am down more than -70 percent.

Like the rest of you I have had a large drop in the value of my 401K and IRAs during the year 2008. But I also had an additional loss. I had to surrender a small percentage (lets say about 3.5%) of each 401K and IRA based on the value of the plan as of 12/31/07 and by the end of 2008 or pay a penalty of 50% of the amount I should have surrendered so in some cases I was dipping into the plans principal. Naturally I have to pay income tax on the amounts surrendered also.