Monday, March 02, 2009
EBRI issues sobering report on 401K losses, especially for baby boomers
Emily Brandon has an article, “401K Fixes for Every Age” in US News and World Report, dated March 2, 2009, link here.
She says that the timing of the recession couldn’t be worse for baby boomers, and says that people who previously retired between 62 and 65 will have to consider working to 66 to 70, often in hourly or much lower paying jobs. 401K’s experienced a 25% loss last year on average, although some people with mostly “productive” stocks (for example, XOM and MCD have held up reasonably well) or with larger cash investments came out much better.
She also has advice for employees in their 50s, who sometimes can increase their tax-deferred contributions fro $16500 to $22500.
Brandon refers to the Feb. 2009 research report (or “Issue Brief”) from the EBRI, the Employee Benefit Research Institute (“The Impact of the Recent Financial Crisis on 401(k) Account Balances”), link here.