What this shows is that in a one-year period, stocks can have a wide range of returns. Historically, they’ve returned between -39% and 47%. In a 5 year period, between -3% and 28%. In a 10 year period, between -1% and 19%. Finally, in a 20 year period, between 6% and 17%.
What is a Good Rate of Return on a 401(k): Understanding the …
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Even seemingly small fees can have a big impact. For example, suppose you invested $5,000 annually in your 401 (k) and earned 7% average annual returns. Paying a 0.5% fee vs. a 0.25% fee would …
People Also Ask what is a good rate of return for a 401k
What is a good 401 (k) rate of return?
What is a good 401 (k) rate of return? The average 401 (k) rate of return ranges from 5% to 8% per year for a portfolio that’s 60% invested in stocks and 40% invested in bonds. Of course, this is just an average that financial planners suggest using to estimate returns.
How can I predict the rate of return on my 401 (k)?
It is not possible to predict your rate of return within your 401 (k), but you can use the basics of asset allocation and risk tolerance, in conjunction with your time horizon, to create a portfolio to help you reach your retirement goals. Also, look carefully at the fees different choices entail.
What is a good rate of return?
Return rates are heavily influenced by prevailing market forces and a host of other factors. Because of this, a good rate of return should generally be at least slightly larger than the rate of return of the market as a whole. A rate of return that was considered good in one era may no longer be so in another.
Does your 401 (k) rate of return depend on the stock market?
Your 401 (k) rate of return doesn’t depend only on the stock market. Your investment choices have a huge impact on what you earn. Robin Hartill is a Florida-based personal finance writer and editor, and a CERTIFIED FINANCIAL PLANNER.™ She is a graduate of the University of Florida. A 401 (k) plan can be invaluable in saving for retirement.