2009 is almost over
Have you taken a look at your 401K statements lately? The advice from the main stream media a year ago was to file your statements away. They suggested that we don’t look at them because they’ve lost too much value. Yes, they did lose value but there is a comeback underway.
The chart at the top is the DOW’s trend for the last 2 years. You can really see the crash that happened, but you can also see a slow and steady upward trend.
A Review of my 401K
I decided to review all my statements and put a couple graphs together to see if my 401K is on a similar glide path. One graph shows the trend of my 401K since April of 2008. I just entered the ending balances from my statements into excel and plotted the graph. The second graph shows the same time frame, but I’ve removed the contributions from the equation. It only shows the effects of the market on my starting balance as of April 2008.
Why split out the graphs? I wanted to see how my contributions have helped or hurt my cause. I’ve have not added any pre-tax money to the account in since the crash. I’ve been following the Dave Ramsey method of not contributing and paying down my debt. It was an easy choice since my company removed our 401K match at the same time.
The money that was added to the 401K was from dividends and 401K loan repayments. Yes, I have two 401K loans that I’m currently repaying. The total additions to the account for 2009 have been $13,563. That amount has only increased the 401K value by $7,317. Not a great ROI, but it will get better.
My company has now reinstated the match and I’ve begun to contribute again. It just doesn’t make since to me to sit on the sidelines anymore. I believe the market will come back over the next 2 years and I don’t want to miss out. I’m only adding enough to get the match. By doing so, I’ll get $3,900 from the company. Turning down $3,900 is just not an option. That means with my part and the company’s part I’ll be adding $7,800 to my 401K this year. I’m excited to be able to contribute again.
I can see the future, and I love it
Having a solid plan for my money helped make this decision easy. I’m still going full steam with my Debt Snow Ball so don’t worry. I was able to move some budget items around to free up the extra money to contribute. I believe this plan with help with my overall worth building endeavors. I know the debt will be gone soon so I’m starting to plan even further down the road. I love what the future looks look 🙂