What is the average return on your retirement investment account (IRA/401K)

[ALiberalModerate]

I have noticed for the past few years that my average return on my 401k has not been that great. It is a long term investment of course so I am not concerned, but rather it just seems like the notion of 10% returns year over year is a rather outdated concept today. That really hasn't consistently been the case since the 90s. Anyway, over the last 5 years my average return has been about 5% or so (some better years, some worse). Otherwise fairly anemic.

So anyway, I am not meaning to create a political debate as to why this is the case, but rather just wanting to see if this is pretty typical.

One last point, your personal rate of return should be the growth from your retirement plan's investments, not what you contribute to it.

 

[TheDemSocialist]

I have a defined benefit plan....

 

[ALiberalModerate]

I have a defined benefit plan....

Those are usually the best in terms of returns as they are professionally managed, but very rare anymore.

 

[cpwill]

I have a defined benefit plan....

....you..... may want to be investing heavily into a defined contribution plan. If one's not offered at work, you may wish to begin stuffing it away in a ROTH IRA. People who depend on defined benefit plans have been in the news a lot over the past few years, and will be in them over the next decade and a half or so. None of those stories have been or will be about the DB plan realizing that it had more money than anticipated, and upping people's benefits.

 

[cpwill]

I have noticed for the past few years that my average return on my 401k has not been that great. It is a long term investment of course so I am not concerned, but rather it just seems like the notion of 10% returns year over year is a rather outdated concept today. That really hasn't consistently been the case since the 90s. Anyway, over the last 5 years my average return has been about 5% or so (some better years, some worse). Otherwise fairly anemic.

So anyway, I am not meaning to create a political debate as to why this is the case, but rather just wanting to see if this is pretty typical.

One last point, your personal rate of return should be the growth from your retirement plan's investments, not what you contribute to it.

Hm. You know, I really should know this, but I don't. The only time I ever tracked individual returns was a couple of stocks I purchased outside of my retirement plans.

I pulled half of my retirement money out into cash last year, and have been waiting for the Chinese bubble/correction to dive fully back in. I figured I gave up on half my growth for a couple of years if I was wrong, and could take great advantage of a buying opportunity if I was right.

The rest of my money is currently parked in an SP500 Index Fund (10.73%), a Nasdaq-100 Index Fund (13.23%) and a Science and Tech Fund (13.64%). All figures for the past 5 years.

 

[ALiberalModerate]

Hm. You know, I really should know this, but I don't. The only time I ever tracked individual returns was a couple of stocks I purchased outside of my retirement plans.

I pulled half of my retirement money out into cash last year, and have been waiting for the Chinese bubble/correction to dive fully back in. I figured I gave up on half my growth for a couple of years if I was wrong, and could take great advantage of a buying opportunity if I was right.

The rest of my money is currently parked in an SP500 Index Fund (10.73%), a Nasdaq-100 Index Fund (13.23%) and a Science and Tech Fund (13.64%). All figures for the past 5 years.

The only reason why I know it is that Fidelity allows you to run reports on your 401k over specified periods of time and will give you an average rate of return. It is very hard to calculate it from annualized returns on individual funds because you are diversified between them and with every contribution you are buying more of those stocks in those funds - each time at a different price. When I just average the annualized returns on individual funds I am invested in, I get an inflated rate of return compared to my personalized rate of return.

 

[TheDemSocialist]

....you..... may want to be investing heavily into a defined contribution plan. If one's not offered at work, you may wish to begin stuffing it away in a ROTH IRA. People who depend on defined benefit plans have been in the news a lot over the past few years, and will be in them over the next decade and a half or so. None of those stories have been or will be about the DB plan realizing that it had more money than anticipated, and upping people's benefits.

I plan on leaving my job either within the next 6 months to a year. And im also certain the next position I hold will not be a defined benefit plan.

 

[cpwill]

I plan on leaving my job either within the next 6 months to a year. And im also certain the next position I hold will not be a defined benefit plan.

:lol: then definitely do that.

 

[ALiberalModerate]

I plan on leaving my job either within the next 6 months to a year. And im also certain the next position I hold will not be a defined benefit plan.

That is the problem with a defined benefit plan, they generate better returns usually, but you don't take them with you and few people work the same place their whole life.

If you go somewhere with a 401k, just invest it all in index funds and put as much in there as you can afford.

 

[TheDemSocialist]

That is the problem with a defined benefit plan, they generate better returns usually, but you don't take them with you and few people work the same place their whole life.

There always is a plus or a minus.

If you go somewhere with a 401k, just invest it all in index funds and put as much in there as you can afford.

:lol: then definitely do that.

I will honestly have to look into the benefits, etc.

 

[cpwill]

I will honestly have to look into the benefits, etc.

Having your own is almost always smart.

 

[brothern]

What is the average return on your retirement investment account (IRA/401K)

7.6% currently, and 11.11% if I had decided to straight up invest all in S&P 500 Index fund.

 

[Surrealistik]

Consumer staples, financial and medical ETFs for my registered investments; ~10.07% (Canadian financials) to ~23% (Consumer staples) annualized return after management fees and DRIPs.

 

[EMNofSeattle]

Hm. You know, I really should know this, but I don't. The only time I ever tracked individual returns was a couple of stocks I purchased outside of my retirement plans.

I pulled half of my retirement money out into cash last year, and have been waiting for the Chinese bubble/correction to dive fully back in. I figured I gave up on half my growth for a couple of years if I was wrong, and could take great advantage of a buying opportunity if I was right.

The rest of my money is currently parked in an SP500 Index Fund (10.73%), a Nasdaq-100 Index Fund (13.23%) and a Science and Tech Fund (13.64%). All figures for the past 5 years.

Very bad plan, pulling out money early is almost never a good idea. Of you're investing over decades then damn market bubbles or timing the market. Just leave the money in. The only one on the roller coaster who gets hurt is the guy who jumps off

 

[tres borrachos]

Mine's averaging 6-8 percent return. It goes up....it goes down. Thank goodness we don't need to access it any time soon.

 

[ALiberalModerate]

Very bad plan, pulling out money early is almost never a good idea. Of you're investing over decades then damn market bubbles or timing the market. Just leave the money in. The only one on the roller coaster who gets hurt is the guy who jumps off

Warren Buffett basically says that you should invest in index funds and just leave it in there no matter what. Hardly anyone ever manages to time the market successfully in a retirement plan.

 

[ALiberalModerate]

Just so everyone knows, if you calculate your returns based on the returns of the individual funds you are invested in, you will get an inflated number. Instead you should calculate your returns by taking the amount of money in your plan on January 1 compared to the following December 31, subtract the amount you contributed over the time period and your employer contributed over that time period, and determine the percentage growth. I would be very surprised if anyone was over 8% average growth over the last 5 years if they did that.

 

[Lord Tammerlain]

That is the problem with a defined benefit plan, they generate better returns usually, but you don't take them with you and few people work the same place their whole life.

If you go somewhere with a 401k, just invest it all in index funds and put as much in there as you can afford.

At one place (and the only one I worked at with a defined benefit plan) it was in your name and could take the pension when you retired even if you left many years before. Of course it would be rather small, and most people would forget to collect the pension when they retire.

 

[Lord Tammerlain]

Returns are low for a variety of reasons, first and foremost economic growth is low. Another significant issue is fairly high service fees that are charged to most accounts. Between 1-2 % in many mutual funds are being charged per year per mutual fund.


For one of my rt accounts, I am negative for the 12 months current, and +5 % for the last 10.

I really do think that the average investor is being scammed to ensure profits (survivability of the banks). When larger investors (with connections have a much easier time to make money) Overall it is a better investment to get rental properties

 

[calm]

What kind of management fees do people pay?

And, if the Federal Reserve hikes interest rates, what will that do to the stock market?

And, with the Federal Reserve pumping 15 or 20 trillion into the economy and trillions more added to the Federal debt, what does that say for inflation and the purchasing value of your holdings in the future?

I retired 2 years ago at 65 and I took everything I had in savings out of the bank. Negative interest rates scare me immensely.

I purchased property.

Calm

 

[SenorXm/Sirius]

When I worked I was actively involved in my 401k, most years I'd get about 10% return. From 2009-2011 I got over 30%. I also did very well on my stock portfolio. I was lucky so I got to retire early.

But now that I am retired I let it ride now in bonds, no need for me to take any chances anymore. So I get about 3-5% now.

I lot on how and what you invest in should be determined on your age, financial situation, when you want to retire. Don't go into it with no plan. Wall Street is nothing more than a casino. Got to use your head.

 

[fredmertzz]

It's been over a year since the S&P 500 has reached a new high. In other words, for the past year+, the market has only been down. It's just a question of 'how far from the top have we fallen?". What's worse? International developed has done worse than we have in that period of time. The market fluctuates. Like you said, it's long-term. The market isn't a casino - the odds are actually in your favor as the market does go up eventually. And if it doesn't, then the financial system has collapsed and then money isn't worth anything anyway. So you really don't have much to lose. Just keep it in there and sit on your hands.

 

[EMNofSeattle]

When I worked I was actively involved in my 401k, most years I'd get about 10% return. From 2009-2011 I got over 30%. I also did very well on my stock portfolio. I was lucky so I got to retire early.

But now that I am retired I let it ride now in bonds, no need for me to take any chances anymore. So I get about 3-5% now.

I lot on how and what you invest in should be determined on your age, financial situation, when you want to retire. Don't go into it with no plan. Wall Street is nothing more than a casino. Got to use your head.

Absolutely false.

 

[beefheart]

I have noticed for the past few years that my average return on my 401k has not been that great. It is a long term investment of course so I am not concerned, but rather it just seems like the notion of 10% returns year over year is a rather outdated concept today. That really hasn't consistently been the case since the 90s. Anyway, over the last 5 years my average return has been about 5% or so (some better years, some worse). Otherwise fairly anemic.

So anyway, I am not meaning to create a political debate as to why this is the case, but rather just wanting to see if this is pretty typical.

One last point, your personal rate of return should be the growth from your retirement plan's investments, not what you contribute to it.

I have an active 401(k) from my job and another Roth from my previous jobs that I occasionally add to, that is my big one. This year is finally turning green, up about 2%, but a few years back it did 18% growth, that was nice...

My company does matching on my 401(k) and I'm 50% vested on that match, it will be nice when I get to 100% vesting.

 

[chuckiechan]

I have noticed for the past few years that my average return on my 401k has not been that great. It is a long term investment of course so I am not concerned, but rather it just seems like the notion of 10% returns year over year is a rather outdated concept today. That really hasn't consistently been the case since the 90s. Anyway, over the last 5 years my average return has been about 5% or so (some better years, some worse). Otherwise fairly anemic.

So anyway, I am not meaning to create a political debate as to why this is the case, but rather just wanting to see if this is pretty typical.

One last point, your personal rate of return should be the growth from your retirement plan's investments, not what you contribute to it.

It depends on your age. If you are young, then 6-8% would be good considering how moribund our economy is. If you are in your 60's 2% is pretty good. If you are retired, 1.5% is not bad. All of these percentages are "net" after fees.

It's all about risk vs age.