Past 15 months have resulted in a $2 trillion loss on retirement savings.

The one upside to the fact that I still don’t have any retirement plan in place is the fact that I didn’t lose any money from it over the past year:

The stock market’s prolonged tumble has wiped out about $2 trillion in Americans’ retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned, rein in spending and possibly further stall an economy reliant on consumer dollars, Congress’s top budget analyst said yesterday.

For many Americans, pensions and 401(k) plans are their only form of savings. The dwindling of these assets—about a 20 percent decline overall—is another setback just as many people are grappling with higher gas and food prices, more credit card debt, declining home values and less access to loans.

“Unlike Wall Street executives, American families don’t have a golden parachute to fall back on,” said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor. “It’s clear that Americans’ retirement security may be one of the greatest casualties of this financial crisis.”

This is one of the ways that the meltdown is going to affect the average American taxpayer and it’s all thanks to the deregulation policies of the Bush Administration.

As for myself, I keep meaning to start a 401K “real soon now” but never get around to it. Perhaps this downturn in the market is a good time to start thinking about it again. Once it appears things are on an upswing might be a good time to get one rolling in hopes it’ll make the 401K grow faster. That’s probably simplistic thinking on my part though as I’ve never had a good head for investment.

10 thoughts on “Past 15 months have resulted in a $2 trillion loss on retirement savings.

  1. The thinking may be simplistic, but I think it makes sense. Everything is deflated right now, so it would probably be a good time to buy in…assuming that you don’t invest in anything that ends up dying in the near future.

  2. It’s never to late (or to early) to start saving for retirement.  Remember, even if you loose 20% in a market crash, you still have the other 80%.  Also, unless you plan on retiring during the crash (or soon after) you’ll most likely make it all back in the long term, so not real harm.  In fact it can work to your advantage, if you put in a fixed dollar amount every month, you end up buying more shares during the down time, which makes for bigger profits later.

    Not loosing anything because you haven’t saved anything still means you have nothing – which is not exactly winning.

    OB

  3. I’ve only had it for 2 years now, but my tax-deferred retirement account has taken a beating over the past year or so.

    Thankfully, I’ve got another 27 years to go, so I just tell myself that I’m in it for the long haul.  Now if I had been planning to retire in the next year, I’d be thinking about postponing retirement.

  4. I’ll always want to diversify. Of course you have to have the luxury of some money first so you can choose what to put it in.

    Also, I have no lukc playing the market either – the only times when I invested into stocks I thought I’d take blue chip stocks which had just taken a massive beating for some reason.

    And they always fell even further. Lol.

  5. Les, you’ve got the right idea.  With the stocks, you should be sitting on them, letting them grow.  They’ll have ups and downs, but for the most part they do move up. 

    I haven’t been able to participate in a 401k since the ‘01 tech crunch, where my 401k dropped something like 10-15%.  By 2007, it had recovered the amount it dropped, and grown by another 50%, all without any further contributions.  I’m sure it’s taken a hell of a beating now (I need to go check it), but I’m nowhere near retirement, so I can ride it out.

  6. I note from the BBC website the owner of the debt clock in times square has had to order a new one, as the current one hasn’t enough zero’s now.  It is of course all the Dems fault, as they have had control of Congress for 2 years, and the President has nothing to do with the current Wall Street crisis.

  7. It is of course all the Dems fault, as they have had control of Congress for 2 years, and the President has nothing to do with the current Wall Street crisis.

    No, but I think it is fair to blame both parties.

    As I’ve heard it (and correct me if I’m wrong) Clinton was responsible for the deregulation, and in Bush’s time he did try to push a bill that would restore that regulation prior to 2002. At that time, it didn’t go through. Maybe it was partisan politics, maybe it was just a badly made bill.

    But when the Republicans had control of Congress, Senate and Presidency… there was nothing.

  8. What would Wall street and the Reps have said if Spring/Summer 2007 the Dem majority had tried to introduce the sort of regulation that they are being blamed for not enacting now- Screams of ‘Socialist’ no doubt.  For how long were we told regulating the banking sector was unnecessary because they could regulate themselves, and control would harm the economy?

  9. From where I’m standing, the long term outlook for stocks is good if your money’s not in the financial markets.  If you don’t plan on touching your money for several years AT LEAST, all you have to do is make sure the companies where you own stock are still around in ten years.  For the most part, outside the financial industry, the companies that are in danger of failing already have.

    You just can’t watch what happens between now and then because volatility is still high and will be for some time.  I’m having a blast, but I’m a day trader, so I WANT volatility.  I’ve already paid for Christmas, but it’s really scary when a company that is otherwise stable dips 30% in one day only to go up 40% the next day and then drops another 10-20% the day after.

    But it’s a safe bet that if you pick a relatively stable company and put your money in it right now, three or four years from now, you will probably get a 30-40% gain out of it regardless of which company you pick.  Having a 401K you started last year or earlier most likely sucks right now if you’re keeping track of how the investments are doing, but STARTING one now is a very good thing if you can do it.  If you have some spare change lying around, add as much of your paycheck as you can to it for at least this year and about half of next year, especially if the company has a matching funds program.

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