what is the greatest return (%) you have gotten on your 410 (k)?

Question

I want to know what is consider a normal rate of return (%) on your 401k...and what is the best practice if you are young

Answer 1

On average over the LONG run, the market will increase by about 8% a year or so +/-.

I think my best year was around 30%. I was clueless for the longest time, just trying to balance my selections. I used morningstar, etc to try to pick the best funds, but net-net, the 401K generally followed the market.

Then, I learned how to trade and my returns improved. Although you can't typically "trade" your 401K, you can move money to/from cash on occasion usually. I've learned since then to take $$ and put any nonmatched funds into either a self directed ROTH IRA or a self directed traditional IRA.

If you're young, put your first nonmatched $4K into a self directed ROTH IRA. Your money there will grow tax free so you won't EVER have to pay additional taxes on your earnings.

Hope that helps!

Answer 2

There is no normal rate, but here are some common thoughts. Few mutual funds have beat the SP500 over the long term whiuch has a historical yearly growth of 12% a year. It is not because it went up 12% a year, but it was because it had some periods where it went up a lot at a short period of time. For instance it could have done nothing for 2 decades and then went up five fold the next three years. Still with the SP 500, the second richest man in the world projects that the average growth for the next 30 years will be 6%. That won't make it so however.

If you like to try for the next big thing, try small caps such as the Russel 2000.