How does your stash compare to this?

[mickeyd]

I'm a bit tired of calculating how much of my retirement funds I have "lost" recently, so I have not done a comparison to these numbers. This makes a case for having a good part of your dough in bonds though.

Retirement account losses in 2008 disproportionately affected wealthy savers. Those with more than $200,000 lost more than a quarter of their savings, on average, according to an Employee Benefit Research's Institute analysis of 22 million participants in more than 55,000 employer-sponsored 401(k) plans. Investors in the $100,000 to $200,000 range suffered as well, with an average loss of 21 percent in 2008. The typical account with $50,000 to $100,000 lost 15 percent.

http://finance.yahoo.com/retirement/article/106588/How-Did-Your-401(k)-Stack-Up-in-2008?

 

[OAG]

Or CD's!

 

[dex]

I'm a bit tired of calculating how much of my retirement funds I have "lost" recently, so I have not done a comparison to these numbers. This makes a case for having a good part of your dough in bonds though.

Until it doesn't.
The bonds position is was advisable if you knew what was going to happen 1+ year ago.

If we had large inflation; the numbers might have favored some other investment.

There is no one investment answer.

 

[aaronc879]

I guess i'm worse off than most. I've lost over 35% overall. DODGX, my largest holding, has also been my worst in the last year.

 

[TromboneAl]

And people with no money at all in their savings accounts lost 0%.

 

[freebird5825]

...This makes a case for having a good part of your dough in bonds though.

I'm a bond girl (no, not THAT kind).

Here's a sampling of bond and balanced funds I owned with 2008 total returns (all negatives) per M*
DODIX -0.29 % - my MVP for all funds
VNYTX -3.69 %
VWAHX -10.45 %
DODBX -33.57 %
switching over to the squad with the most penalties...my MVP of the year for stock funds...no surprises here...
DODFX -46.69%

Overall portfolio loss -21.76%.
Referencing the article's parameters...2007 peak portfolio value over $250K, age 50.
So much for diversification and balanced (50/50) investing approach.
Oh well, staying the course. If snow can melt in Feb where I live, the market can recover.

 

[FIREd]

I still lost about 29% (XIRR) despite having about 35% in bonds/cash. But they are not using XIRR in the article. They seem to just compare account balances at the beginning and at the end of the year. In that case I was down only about 6%.

I am in the $200K+ / 25-34 year old category. I'm doing good based on account balances, and "bad" based on age (but only because I have much more savings than my young peers).

 

[Westernskies]

The market has rebalanced my 401K portfolio into a 201K. Down 30+%... Still contributing, though. Just hope I live long enough to enjoy the recovery

 

[Bimmerbill]

The TSP sent me my annual statement and seemed to figure out my rate of return by not counting my annual contributions. Something like -37%.

 

[Alan]

50% bonds, 2008 was -16.25% IRR. Sucks but could be worse.

 

[Grep]

For me, one of the more interesting things in this article is one of the last sentences:

"... baby boomers with 20 to 29 years on the job will have to work an extra year and nine months to boost their portfolio balance to where it was a year ago."

A year and nine months to get close to the market peaks? That will do very nicely for me too, thank you, but there isn't a snowball's chance of it happening by savings from work in my case. Of course, most of these folks have modest savings, so I suppose much of this really is possible via new contributions. In a way, this is a bullish finding.

 

[Gworker]

The TSP sent me my annual statement and seemed to figure out my rate of return by not counting my annual contributions. Something like -37%.

Hey, you beat me by 1%, I'm only down 36%. Now I don't feel so bad.

 

[CyclingInvestor]

100% individual stocks, down 19.7% in 2008.

 

[ikubak]

And people with no money at all in their savings accounts lost 0%.

Bob Dylan said it long ago.....

When you ain't got nothing, you got nothing to lose

 

[Spanky]

100% individual stocks, down 19.7% in 2008.

That's not bad compared to the S&P500.

 

[CuppaJoe]

Seems to me that a "wealthy employee" would have more than $200,001 in a 401k or other retirement-equivalent accounts, a lot more. ??

 

[Linney]

Retirement account losses in 2008 disproportionately affected wealthy savers. Those with more than $200,000 lost more than a quarter of their savings, on average, according to an Employee Benefit Research's Institute analysis of 22 million participants in more than 55,000 employer-sponsored 401(k) plans. Investors in the $100,000 to $200,000 range suffered as well, with an average loss of 21 percent in 2008. The typical account with $50,000 to $100,000 lost 15 percent. <br>
http://finance.yahoo.com/retirement/...ack-Up-in-2008?

I found this article interesting and shared it with my spouse yesterday.

Yep, we're in the 'wealthy savers" category. But --- for any given age range -- I'd rather be the saver who had $200,000 and now had 'only' $150,000, than be the saver who had $50,000 and now had 'only' $42,500.

Makes me wonder if "wealthy savers" got that way because they were willing to save more or be more aggressive investers (?) Whatever the answer, I'd rather have $150,000 than have $42,500.

--Linney

 

[W2R]

Seems to me that a "wealthy employee" would have more than $200,001 in a 401k or other retirement-equivalent accounts, a lot more. ??

That was my thought, too.

Besides, determining wealth based only on retirement account size seems a little ridiculous. Many middle class workers also manage to contribute the maximum to their retirement accounts, though naturally it is more of a struggle for them to do so.

If you take "Joe Wealthy" and "John Middleclass", both the same age and both of whom have contributed substantially to their 401K for the same number of years, I would expect that "Joe Wealthy" would have a much larger taxable account than "John Middleclass" although their 401Ks might not be too different in size.

 

[ziggy29]

Seems to me that a "wealthy employee" would have more than $200,001 in a 401k or other retirement-equivalent accounts, a lot more. ??

Depends. If someone has a rather good job with a generous pension, they may not have felt a strong need for personal retirement savings. But if a 401K is all they would have, they could be screwed. Plus, maybe wealthier people feel less "mortal" about their retirement chances so they don't pursue it as aggressively in some cases?

Heck, I'm 43 and hardly "wealthy" as the sense is typically used, but 15 months ago I had more than $500K in retirement accounts (down by nearly 1/3 today, unfortunately). Then again, this is almost all I'll have for retirement until SS (other than a very puny old pension which hardly makes a dent), so I *have* to be aggressive and contribute until it hurts if I ever hope to retire.

Still, if someone is in a high tax bracket, you'd think they want all the tax-deferral they could get. But maybe they just suffer from affluenza...

 

[Dawg52]

100% individual stocks, down 19.7% in 2008.

You need to write a 'how to' book. Most people lost that much with a 'balanced' portfolio.

 

[OAG]

This is like trying to define net worth (it depends how you want to define it). If you are adding money to the market as it is dropping and then comparing a past date portfolio balance to a present day portfolio balance would it not be a lower percentage of loss since the "new money" has not gone down as fast?

 

[ziggy29]

This is like trying to define net worth (it depends how you want to define it). If you are adding money to the market as it is dropping and then comparing a past date portfolio balance to a present day portfolio balance would it not be a lower percentage of loss since the "new money" has not gone down as fast?

That's where the XIRR function comes into play.

My year-end 2008 401K statement shows an XIRR of -28.0% even though in dollar amounts, it dropped 19% from 1/1/2008 to 12/31/2008 because of the added contributions.

 

[Hal3]

Don't forget to figure in inflation. The price of my usual baked lasagna entré at our neighborhood red-checkered tablecloth Italian restaurant went up a buck this year.

That is how I measure inflation, by the way.

I've watched it go from $5.95 to now $12.95 over the years for the exact same serving of lasagna. That does include side salad with house Italian dressing and hot garlic bread so ... I'm happy.

Just sayin'.

 

[OAG]

That's where the XIRR function comes into play.

My year-end 2008 401K statement shows an XIRR of -28.0% even though in dollar amounts, it dropped 19% from 1/1/2008 to 12/31/2008 because of the added contributions.

Question Ziggy: So which number is correct, or which would use answer the "how much are you down" question? However, I suspect you would answer it as you have. However, I think many actually think the lower one is the correct answer. I am not trying to be smart either since everyone (well almost everyone) knows I do not invest in the SM (only FDIC CD's over the past 30 years).

 

[ziggy29]

Question Ziggy: So which number is correct, or which would use answer OP's question? I am not trying to be smart either since everyone (almost) knows I do not invest in the SM (only FDIC CD's).

I think the XIRR (in my case -28.0%) is the more correct number in terms of measuring portfolio performance. If you're talking about how much you're worth on 1/1/2009 relative to 1/1/2008, then the simpler calculation the takes the percentage delta in start and end values (-19.4% for me) would be more appropriate.