Retirement Accounts-401-k, 403-b: Is your balance going up or down?
I don’t deliver babies any more. Do I miss it? Occasionally. I miss the joy and interaction with those patients who you connect with. I don’t miss the malpractice worries, the babies having babies, and families who don’t appreciate the responsibility involved in raising a child.
Sleeping all night is a wonderful thing-although a certain nurse woke me up at 2:30 this morning…..
Fortunately, I don’t have to miss the Ob nurses-because our Gyn wing connects to the Ob wing, and we share the same nurses. They do a great job.
And to get around to the title of this post, as we often do, the nurses and I were talking money when I made rounds this morning. One of the night nurses was lamenting that her account balance in her 403-b seemed to never go up, although she increased her amount every year, and the hospital was matching part of it.
This phenomenon is very common in retirement accounts recently. As everyone is aware, the stock market has taken a huge hit in the last few years. And though the market has averaged 12% growth or so over the last 50 years, it has seen almost nothing in the past decade. And has been down 30-50 % in some aggressive accounts last year alone.
However, since March the growth has been over 25% depending on which index you use.
What do you do when your 403-b balance is stagnant?
So the secret is to keep on keeping on. No one knows when the market takes off, and it has been proven time and time again, that those people who try to time the market by going into and out of stocks, usually miss the biggest up days.
So even though watching your balance is like watching paint dry-don’t stop funding the account. You would just spend that money on something inconsequential, wouldn’t you?????
Now does that mean that the market will go gang-busters the next 10 years? I wish I knew. If I did I probably wouldn’t be treating bladder infections in the middle of the night!!!!!
But I do know that putting away small amounts of money over your working career is the only way to significant wealth for most people. Having the results of stock market and interest rate growth work on your money will result in a healthier retirement account than:
- No retirement savings
- Depending on Social Security
- Depending on your kids to support you in your old age
The secret here is to continue to put as much as you can afford in your retirement account each year, and try to increase that amount- until you are saving 15% of your income in some sort of retirement vehicle. (I will discuss the options such as Roth IRA’s in another post.)
Of course, to be able to do this, you must have your spending under control, and your debts knocked out-I know, easier said than done.
So let us hear your retirement account questions-and if you need “Emergency Money Resuscitation” then hit the link, don’t delay, hit the link. If you don’t know what the link is, then hit the comment button, and ask, and I will post on how to hit a link in a blog…. If you do hit the link, you can sign up for my free e-book, and also receive my mini-course on personal finance delivered straight to your email box. Free, you can’t beat free!