Keep Investing In Your 401(k) Retirement Plan

Here’s a question for you: If you put $5,000 dollars in your 401k retirement plan this year and your employer also puts $5,000 into your 401k retirement plan and over the course of a year your investments lose 40% of their value… assuming all of this, how much would you have lost?

The answer may surprise you. You’ve actually not lost anything - Your Retirement Planning has still given you a positive return. Remember that 401k retirement plan are usually matched by your employer, and quite often dollar for dollar up to a certain percentage. Assuming that the $5,000 you contributed was the maximum that your employer would match you immediately net a 100% return on your money. After all, you put in $5,000 and so did they. Now if that entire amount ($10,000 at this point) lost 40% of its value you’re down to a 401k retirement plan value of $6,000 dollars. All from an initial investment (out of your paycheck) of $5,000.

Guess what that means? Your 401k retirement plan portfolio has still gained 20%. That’s a great return on your money by any standard. Things might be dramatic out there in the world of money, but you have to remember that you are in it for the long run, and with the exception of those who plan on retiring sometime in the next 5 years you ought to maintain your 401k retirement plan.

A secure retirement is going to depend almost completely on you and how well you do at preparing for said retirement. If you don’t start planning now then you may not be ready when your retirement finally comes around, and that is the last thing you want. So please take the time to sit down and make sure that you are prepared for your Retirement Planning.

Don’t let the news frighten you, don’t check your investments daily and most of all don’t go looking for bad news without thinking about what good can (and ultimately will) come from the difficulties we are now facing. But most of all don’t sell out of your 401k retirement plan and PLEASE continue to invest in it. You’re practically guaranteed a positive return, even with negative stock returns in the 30-40% range. After all your employer is likely giving you FREE money, just for taking advantage of their 401k retirement plan.