What is a good yearly rate of return on 401k

Even seemingly small fees can have a big impact. For example, suppose you invested $5,000 annually in your 401 (k) and earned 7% …

What Rate of Return to Expect From Your 401(k) | The Motley Fool

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Just four years ago, the average rate of return on 401 (k) plans was an abysmal -.4%. Relative to the overall return of the S&P 500 over the same time it fared a little better as the S&P had a -.7% return, however when you look at buy and hold investors they fared better at a return of 1.2%. Looking at the recent past five years, Motley Fool …

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What should be a good rate of return on your 401(k)?

With that being said, what should be considered a good rate of return on your 401 (k)? Christine Benz, from Morningstar, claims a return of 5% per year is a good number to use for planning. While it’s good to have a baseline number to use for planning, 5% falls short when compared to historical returns from the S&P.

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What’s the right 401 (k) return to expect?

There’s no one return that’s "right" to expect from a 401 (k). But it’s not like it’s some situation or event outside your control—like watching the weather and making vacation plans accordingly.

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.

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What drives down the average 401(k) return?

If it’s not obvious yet, the key factor in dragging down the average 401 (k) return is fees. Most 401 (k) plans are chock full of fees, and that does one thing – it takes money away from you and puts it in someone else’s pocket.

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What Rate of Return Should You Expect From Your 401k? Video Answer

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