Subscribe$500 Billion of 401k wealth is destroyed
October 30, 2008
There is real concern these days that many people who were planning on retiring will have to postpone that idea for a few more years or perhaps indefinitely. That brings up a whole host of problems that will probably show up in unexpected ways. For one, as these “senior” workers keep their jobs, the cost for benefits will go up – potentially costing companies more and more.
More worrisome though is the fact that the jobs that were supposed to be slotted for a new crop of young workers will be unavailable. Remember, these are the spenders while the older population are considered the savers. So while this is possibly good news for the investment markets as more money may be poured into savings accounts, it may be bad news for the economy as spending is reduced.
According to Economy.com:
The woes from subprime financial crisis are reducing household financial wealth. The losses on household financial assets since the end of 2007 in corporate equities, mutual funds, and pension fund reserves reached $ 3.8 trillion at end of the third quarter of 2008. These dramatic losses are threatening the security of millions, particularly baby boomers who approach retirement. The retirement accounts have been hit hardest from evaporating stock market gains. According to Employee Benefit Research Institute (EBRI) testimony, around 10% of wealth stored in 401(k) plans has been lost in the first three quarters of 2008.
Obviously this is not good and more problems will be noticed as the October retirement plan statements are delivered and eventually opened. In fact, it is now estimated that a total of $500 billion was lost in 401k plans thus far during 2008, but October alone may have accounted for $200+ billion.
In response to all of the wealth destruction that has occurred, there will undoubtedly be some significant adjustments to the current 401k plan options that could very well hurt providers, especially the Mutual Fund companies that have done very little to protect investors. (See Mutual Funds in Peril)
Related Posts:
- Report: Mutual Fund Outflows (TrimTabs) Not looking good as more and more investors are pulling the plug....
- Shhhh, Dubai Has Another Little $20 Billion Problem When we first learned about Dubai’s debt woes a couple of weeks...
- Report on Mutual Fund and ETF Outflows Domestic Mutual Funds and ETFs continue to show outflows as reported by...
Comments
16 Responses to “$500 Billion of 401k wealth is destroyed”
Got something to say?
“new crop of young workers will be unavailable”
As opposed to these jobs being out sourced?
Instead of bailing out Banks, Mortgage lenders,etc: How about giving everyone that lost money in a 401K $50,000 or more!
The american public has been betrayed. We used to have winners and losers in this world. But now, in our touchy feely society, everyone has to be a winner (whiner). So we don’t hurt anybodys feelings.
The heck with that, MY dad don’t taught me, don’t start anything you canot finish. Whether win or loose, you finish it. Ig the banks and other businesses cannot stay alive, I say let them be weeded out, not bailed out.
Survival of the fittest, it’s natures way, for all of you GREEN people.
Um, if they were that close to retirement, why were they so deep in the market? Should they have been mostly in bonds by now?
I’m told by my companies CFO that unless people cash in their 401k now, they haven’t lost anything.
Is this true.?
THX in advance.
And “W” wanted to scuttle Social Security for this joke? How many of his friends would have gotten “bonuses?”
I think the wealthy should be put in jail
I think that the bankers that are working in the Banks that have failed should take a cut in pay and forget bonuses. I do not want my money in their pockets because of their mistakes. I would rather have the money in my pocket and let them suffer a little.
It’s insane how the media, government, and banks use there three dollar words to say virtually nothing. It’s not complicated at all. Enough politics, enough expert analysis. It’s time for some good old fashion accountability. I guess I should go study economics for a few years, then put it in simple terms for motivated single mom and let her save the world!
Bank bailout! How about the poor peoples money they stole. The American people with regular jobs don’t get bailed out (aka “Get out of Jail Free”) for their failures or short comings. This is a huge mistake to pay any White Collar person
with this Government plan to revive the Economic mess caused by bad Financial Institutions and Wall Street companies decisions. They (Ones who profit and scammed us, the wealthy) should be stripped of all their possessions and live
the life of the homeless and poor. If not that, then put in jail.
I believe America deserves better. Lets not pay high didvidends to the wealthy.
Everyone deserves to work and have a good life. Don’t let the $Billions go to dirty filthy pockets.
[...] market”. All this so that bankers and corporations and politicians can profit, from your losses. And you allow them to throw more and more of your money down the toilet. Your dollar is dying. The [...]
[...] market”. All this so that bankers and corporations and politicians can profit, from your losses. And you allow them to throw more and more of your money down the toilet. Your dollar is dying. The [...]
[...] All this so that bankers and corporations and politicians can profit, from your losses. And you allow them to throw more and more of your money down the toilet. Your dollar is dying. [...]
[...] market”. All this so that bankers and corporations and politicians can profit, from your losses. And you allow them to throw more and more of your money down the toilet. Your dollar is dying. The [...]
[...] market”. All this so that bankers and corporations and politicians can profit, from your losses. And you allow them to throw more and more of your money down the toilet. Your dollar is dying. The [...]
Inform appropriate!!!! Anybody recollect of a well-thought-of lender that YOU personally obtain tempered to in the past? Essential recommendations fast.