27 Oct 11 We are currently in a secular bear market.
Their retirement and financial plans usually use an assumption of an 8% average annual rate of return. (Source: ) This has left many, especially the baby boomers, scratching their head –wondering if their retirement dreams will not come true.
Many baby boomers will have to figure out an alternative means to retirement. Other than choosing the plan and funds to be included, most employers do not offer any assistance. If the stock markets continue to provide a rate of return less than expected.
Inflation during this period has averaged 2.7% per year. With two back to back economic bubbles popping since 2000, this one may last longer. Many individuals who are saving for retirement in their 401K plans have been disappointed by the rate of return they have received.
This will have a major impact on the retirement of the baby boomer generation. They now need to play catch up due to the performance of the market since 2000. Investors need to become more educated about the history of the markets. Since 2000 to the end of 2007, the S&P 500 index has returned an annual average of only 2.45%.
These plans have mostly been self directed by the employee. The last one lasted 17 years. This does not include the year to date loses investors have experienced in 2008.
Further information is good for read:
- The last one lasted 17 years. This does not include the year to date loses investors have experienced in 2008. Many baby boomers will have to...
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- Why the 401(k) Market is a Profitable Niche For Financial Advisors The pension plans are popular investment vehicles. Almost all those who have already worked in medium and large enterprises, not...
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