LaCostaRacer

^dmikon- I give up. I think I have been pretty clear in all my postings including the quoted one above that began this tangent. I have nothing more to share on comparing relative performance. Little did I know the above post could unravel a thread on sharing 401K Performance, but it did.

If you don't get it now, I don't think you ever will. Use whatever means you want to score your portfolio's performance, I really don't care.

I use the SP500 AS THE BENCHMARK FOR <<ALL>> MY PORTFOLIOS (401K, taxable, IRA, ROTH) performance because it appears to be widely accepted by many people (other than you) as viable benchmark- on average the SP500 usually yields about 10% gain a year.

Here's what Wikipedia says about the SP500:

"...After the Dow Jones Industrial Average, the S&P 500 is the most widely followed index of large-cap American stocks. It is considered a bellwether for the American economy, and is included in the Index of Leading Indicators. >>>>Many mutual funds, exchange-traded funds, and other funds such as pension funds, are designed to track the performance of the S&P 500 index. >>>>Hundreds of billions of US dollars have been invested in this fashion. ..."


End of subject for me anyway until I share my 2010 year end performance which should beat the SP500 . Next time I'll itemize each account for complete transparency.

LaCostaRacer

^Not much activity here. I just closed the books on 2010 and have numbers to report for 2010 annual performance.

The SP500 closed at 1257.64 and yielded a 12.78% gain for the year- that is my benchmark to beat.

IRA: 14.8% YTD gain
ROTH: 10.1% YTD gain
401K #1: 18.4% YTD gain
401K #2: 17.2% YTD gain

So 3 of the 4 accounts outperformed the SP500 by 15% or more and one lagged by 21%. I suspect these gain percentages will be tough to beat next year, but hope to have greater relative gains to SP500 next year. I had similar performances with taxable accounts so 2010 was a very good year for me.

doopstr

^If you include interest and dividends the S&P500 returned 15.06%
http://www.standardandpoors.com/indi...sduf--p-us-l--

LaCostaRacer

^Thanks Doopster and happy New Year.

I hadn't considered dividend yield but should have. So I guess only 2 of my accounts actually out-performed SP500. I had much better results on the taxable accounts in which one did a 61% gain for the year- that one had a large SLV position in it.

LaCostaRacer

The SP500 closed at 1332.41 and yielded a 5.92% gain so far when you also count interest & dividends- that is my benchmark to beat this time.

IRA: 5.5% YTD gain
ROTH: 6.0% YTD gain
401K #1: 4.8% YTD gain
401K #2: 5.2% YTD gain

The SP500 had one of its best quarters in many years so it was a tough benchmark to beat- only one account beat it and not by much. I had only one taxable account that significantly beat the SP500 that made 10.1% in the first quarter- that had a heavy exposure to Silver.

gatrhumpy

iTrader: (1)

In 2008, my portfolio was down about 43%. 2009 - up 37%. 2010 - up 18%

Bearcat94

Ours have done well the past 12 - 18 months as well.

It also looks like recently (last quarter or so) that Growth Stocks/Funds have started to outperform Values Stocks/Funds and Mid & Small cap are outperforming Large Cap.

Both of those are signs of economic growth and confidence. IOW - more money is available for moderatly more risky investment.

YeuEmMaiMai

My 401K figures for

2010. 13%
YTD for 2011 16%

Anachostic

I just evaluated my entire retirement portfolio. I've been investing for 12 years now and my gain on the entire amount is virtually zero. It's almost as if I've deposited 10% of my income in a low-interest savings account.

So yeah, I have about 1.2 years gross salary saved after 12 years. It saddens me.

LaCostaRacer

^You are not alone. One big problem these 'flat' 401k accounts are causing is that people need to work longer. This in turn keeps the unemployment rate high because people that would really like to retire can't and must work.

If you're invested in those 'lifestyle' funds (2030, 2040, etc), watch them closely. A component of each fund is invested in bonds and those will not be very desirable in the future when interest rates pick up.

It might be safer having more money in an international fund in some ways- seems like the big hit has already come to them.

YeuEmMaiMai

So one of you guys want to tell me what is going to happen to the stock market when the USD is no longer the reserve currency? (let me give you a hint, you are going to wish to God that you had tangable assets like GOLD and other valuable items)

LaCostaRacer

^Yes I have PM as well. The problem is you can't hold gold or even gold is-hares in most 401K accounts- IRAs yes but not the typical 401K with a limited assortment of funds to choose from. No lifestyle fund will expose you to PM.

That's the biggest problem I have with 401Ks at the moment and one big reason why I cut my contribution to 1% now. I'll gladly pay the taxes to have some tangible holdings instead. With the way things are going, I'm likely to be in a higher tax bracket when I retire, so in some ways I might be saving money and holding value now.

I'm using a ROTH as my retirement vehicle so I have more flexibility in what I hold and I get to keep the cap gains tax free (in theory if they don't change that on us).

mrsteve

iTrader: (1)

Up 21% in the past 12 months and actually up 21% in the past 33 months.

subinf

I don't have a 401k. Any similar options I can explore? I have a Roth IRA...

Anachostic

We've had a pretty good year in the stock market. Time to re-evaluate.

I have a Traditional IRA, Roth IRA, one inactive 401k and one active 401k. Combined, I have about 1.5x my current salary, but my salary has been significantly bumped two years in a row, so I might be at 2x in last year's figures. I wonder how I should compute that.

mrsteve

iTrader: (1)

YTD return is 24%

LaCostaRacer

I had a pretty decent retirement account performance for 2013

401K #1 : 37.8% (current employer)

401K #2: 27.6% (former employer)

These accounts have a heavy focus on SP500 and international funds.

For a perspective, a couple ways I track performance:

SP500: 29.6% (does not include dividends)
BRK/B: 32.2% (does not include dividends)

New Car TL-S

31.9

YeuEmMaiMai

yeah last year was great but this year we are down for the first 1 month...and it's not looking good for this month

speedemon90

So i just started my career, literally 3 weeks ago. My company is not matching till after I've worked for a year, then it will start that fiscal year. So I wont get a match till August of 2015.

They offer me the choice to put money into a 401k and Roth 401k. Now I kinda know the difference as one is pretax the other after tax. But I was wondering if I split it up and say go 66% in roth and 33% in regular. Is that splitting my assets in two separate accounts which will limit the amount I can compound on, or is it all in the same account just 66% of the money in there will be after tax, and 33% will be pre-tax.

Anyone else offered anything like this?

And also if they're offering me a roth 401k, is there a point of opening a roth IRA till I can max out my 401k? I wont be even going close to maxing since I'm working on paying off a good amount of student loans. But i have a small percentage going towards the roth/nonroth 401k as of now. I'll increase it when more of my debt goes down.

My main question is whether to split it or go all roth. And also if I should even consider a roth IRA before I max out my roth 401k??

Thanks!!

Anachostic

I say split it. My emp does the same. Although it looks like all one balance, I know there's 3 buckets behind the scenes: pre-tax, post-tax, and emp matching. I know this because my downloaded tx's show 3 buys per pay and 3 sells every month, plus an extra 3 sells at the end of the year. Those sells are apparently management fees for each of those "accounts". I'm kinda disappointed in my provider, Transamerica.

doopstr

Unless you want to deposit more than an IRA allows, I wouldn't put money in a non matching 401k. Once August 2015 comes around you can start contributing to the 401k.

You may decide 12 months from now that you hate your job and you won't have to go through the hassle of getting the money out of the 401k when you jump ship.

LaCostaRacer

speedmon- you need to determine if the employer match can happen in the ROTH or if it only happens in 401K.

I would split between the two as well and insure that the employer match goes into the 401K so you get maximum growth in that account. Most company matches will vest if you change employers and it's pretty simple moving the 401k to an self-managed IRA (my recommendation) or another employer's 401k plan in the future.

The actual split depends on your age. Younger folks should consider a larger portion going into the ROTH to make the most out of the tax free withdrawals of gains while in retirement.

You should consult a tax adviser for better advice but this is decent free advice.

speedemon90

Yea but what's the difference between a roth IRA and a roth 401k? Isn't there not much of one so I should just go with 401k?

speedemon90

Yea currently i have a bigger portion going to roth than regular. I am pretty sure my company matches with either the roth or regular, but I'll need to double check on that.

Thanks for the help all of you!

doopstr

Both are funded with post tax dollars. Roth IRA has a yearly contribution cap of $5,500. Max Roth 401k yearly contribution is $17,500. So in that regard the Roth 401k has it's advantage. 401k also has the advantage that the money will be taken out of your pay automatically every pay period.

Where the IRA has it's advantage is that you can probably find an IRA with lower fees than what your 401k charges. Also, with 401k you will probably only have a handful of funds where you can invest your money. IRAs have a greater flexibility in that you can usually buy whatever fund or stock that you want.

If you think you are going to put in more than $5,500 a year then it's probably just easier to go with the Roth 401k. Less accounts, less headaches.

Update: One major difference I found in Roth 401k and Roth IRA is that Roth 401k does have minimum required distributions while the Roth IRA does not.

http://www.irs.gov/Retirement-Plans/...-Distributions

doopstr

BTW, I think the RMD for the Roth 401k could be avoided by doing a rollover to a Roth IRA.

NSXNEXT

iTrader: (2)

One difference is Roth IRA has income limitations where Roth 401K does not.
Here's a good link.

http://www.irs.gov/Retirement-Plans/...mparison-Chart

speedemon90

ohh distributions no later than 70.5. I'll be fine with that I'm sure. I don't plan on working when i'm that old anyway.. assuming i have good retirement savings!

Theres enough of a choice i have with mine. I got most of it in stock growth some in some other stock one think index funds? Dont remember exactly.

Anyway thanks a lot guys!

speedemon90

Damn theres a steep penalty for not taking out the min. RMD.

Gotta make sure I set a reminder in 40 years haha

Rapture

My employer-matched 401k's performance over the past year (since this time last year) is about 15%... but I lost 3% apparently last quarter...

If my employer is matching, is it just an all-around good idea to contribute as much as you can instead of say allocating those extra funds to an IRA? I'm sure it depends on the IRA, but I mean just in general.

doopstr

You should do whatever you can to get the maximum match from your employer. If they are matching 50 cents on the dollar think of that as a 50% return on your investment.

speedemon90

I am at a loss of 0.4% for the year. I was down 4% at one point.

ArthurL

iTrader: (4)

Would it be safe to say that it's good to contribute to your 401K when possible? My company starts to match 5% after a full year of being employed, which for me is next month. I'm also considering opening up a Roth IRA soon as well through Vanguard.

maharajamd

iTrader: (1)

^Yes. Max it out. At least up to what they match. It'd be dumb to leave something on the table.

Anachostic

I'm disappointed in my company's 401 provider (Transamerica) and was thinking about lowering my contribution to the company match level and putting the difference in my TD Ameritrade IRA, which is doing rather well. I'm not so good with the maths, but I know that the process would involve: lowering my contribution, which raises my taxable wages. My paycheck taxes would go up along with my net pay. To contribute to the IRA at the same amount, I'd have to cover the extra taxes that were withheld, then wait until tax time to claim those contributions for the refund.

Although I love the idea, it seems like a big hassle and floating a lot of money for that benefit. I think I'm going to have to stay with my cruddy 401k.

maharajamd

iTrader: (1)

The math is there though, right? So figure it all out and see which one is more advantageous for you?

03silvertypeS

I agree wtih maharajamd, at least max out what the company will match into your 401k. Just be cautious with the investment funds they may have available. Try to do a little homework and stay away from any fees if possible. My company (along with many other companies) tries to first push the lifepath plans and a few other funds which all have annual fees associated with them. However, my 401k is comprised of the only 5 options (bond fund, large cap index fund, small cap index fund, international fund, & company common stock) that don't have fees associated with them. Also, be sure to rebalance your investment portfolio (at least once a year, but quarterly if possible) to maintain your strategy. I neglected to rebalance mine for a couple years and ended up with a much higher percentage of company stock than I was comfortable with. I work in financial services, so I really don't want my company stock percentage getting too high.

Rapture

Well my YTD return is -2.07%, 3 month return is -4.68%


The real kicker is that I've been working extra hours these past few months, contributing a decent amount this whole time... just to have it go out like that. I'm too nervous to disable any contributions since I'm sure it'll bounce back immediately after, mirite?

nist7

Dude dude, just chill.

You know the saying right "buy low, sell high." If the market continues to crash even harder....people (well younger people) should be rejoicing at the fact that prices are lowering and so they should be contributing even more!

People's psychology is wired opposite for investing success. When everything is going down the drain.....the natural reaction is to flee to run to sell....but guess what, you just sold low...and then when things are going up again, oh well lets get back in.....guess what you just bought high. So completely opposite of what y ou are supposed to do.

Check out how average investors are pretty dumb by a great writer, he wrote a book on behavioral economics: http://blogs.wsj.com/moneybeat/2014/...are-investors/

Also this reminds me of a physician couple who sold out at the bottom in 2008/2009. Then when 2013 came around (one of the biggest bull markets of the last 10 years) they said: oh man we don't want to be left behind, lets get back into stocks. So look at exactly what they did....they sold when the market was low.....and then bought back in at 2013 of all years.....one of the high points in the market.....so again they sold low and bought high.

Historically stock market has generated decent returns over 30 year periods so no worries. You gotta stay the course and be in it for the long-term Of course hopefully you are in a low cost mutual fund like an index fund. If people are in individual stocks or expensive funds then there may be heavier losses.

Now if you are 50 or 60 and reaching retirement age? Then you shouldn't care less what the DJIA does because you should already be dialing back on your stock allocation and are moving more into bonds.

Check this out: Lazy portfolios - Bogleheads