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Online calculators can help you estimate how much your 401(k) will earn over 20 years.
Many variables determine a 401(k)’s return, including the investments you choose, stock market performance and 401(k) fees.
Looking at the recent past five years, Motley Fool found an average 401(k) return of just over 7%. While seemingly a good return, that’s compared to a near 15% return over the same timeframe for the S&P – so the average 401(k) returned less than half of the return of a broad-based index.
The rate of return for your 401(k) depends on on a few factors. Learn how your investment choices can impact the returns you can expect from your 401(k).
Your 401(k) return depends on more than just market conditions and investment selections. Let's analyze these hidden factors to see what you can expect.
Heading into the last weeks of 2023, the S&P 500 appears poised for a gain, which should cheer workers saving for retirement in their employer-sponsored 401(k) plans.
What is the typical 401(k) return over 20 years? The typical return for 401(k)s over 20 years is between 5% and 8%, assuming a portfolio sticks to an asset mix of roughly 60% stocks and 40% bonds. There’s also no guarantee that returns will fall within that range.
What Is the Average 401(k) Return Over 20 Years? The average rate of return on a 401(k) ranges from 5% to 8%. However, the typical 401(k) holds a mix of roughly 60% stocks and 40% bonds, so it’s also subject to the whims of the larger marketplace.
What is the typical annual return for a 401(k)? Based on a standard portfolio mix of 60% stocks and 40% bonds, the average rate of return for a 401(k) generally ranges from 5% to 8%.
Discover how time and compounded growth of earnings can help even a modest 401(k) balance grow to a significant sum over 20 years.
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