How San Diegans Are Handling Their 401Ks - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

How San Diegans Are Handling Their 401Ks

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It can be hard to stomach, watching your 401K drop with the stock market. But are people doing anything differently?\r\n\r\nA new report that analyzed 2.7 million U.S. employees through October found average corporate retirement accounts dropped from 79,000 to 68,000 this year, but we found many people lost a lot more.\r\n\r\nEvery time Faye Hall looks at her 401K, she has the same reaction.\r\n\r\n"It's awful, absolutely awful, but what are you going to do," she said.\r\n\r\nThe truth is, most Americans don't know what to do, so they're not doing anything. \r\n\r\nOn average, 401K balances nationwide have dropped 14 percent since last year, according to a new study, and contribution rates have dropped less than a quarter of a percent.\r\n\r\n"It's depressing just for the fact, I mean the whole economy's down, and you know it's depressing to think you know I had x amount now it's down to this amount," Qualcomm employee Thomas Barb said.\r\n\r\nBarb is one of the more involved investors. Instead of singing the retirement blues, he's mixing things up. \r\n\r\n"I've restructured it to take a lot of stocks out of it and put more secure things into it like bonds," he said.\r\n\r\nBut like Barb, those close to retirement aren't taking the situation lightly.\r\n\r\n"Probably over the holidays, sit down and decide what's best, move it around, or move it to something safe until the market turns around," Hall said.\r\n\r\nHall says she's considered emptying the account. \r\n\r\n"I would rather use the money for something that I need, versus giving it away," she said.\r\n\r\nBut most experts recommend riding the wave, even if it means shedding a few tears in the process.\r\n\r\nThe report also says to watch for employers cutting their matches in the coming months to conserve cash. About six years ago it says 5 percent of companies reduced their matching contributions, and that was before this economy. \r\n\r\nOverall withdrawals are up 6.2 percent from 5.4 last year, mostly due to a 16 percent increase in hardship withdrawals, which come with penalties.\r\n
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