THE NEW RULES OF RETIREMENT SAVING • 31
How bad was it? For those number geeks like me, this next sec- tion will be very exciting. If you’re not a numbers person, I prom- ise I’ll put it in words you can understand, too.
Let’s look at the S&P 500®, a measurement of the 500 largest stocks in the market and an index many people reference when talking about what the “market” did today. If you had a 401(k) with $100,000 in it, completely invested in the S&P 500®, what would have happened over the first decade of this century? Well, look at the line on the chart above marked, “Annual Total Return of the S&P 500.” This represents your ac- count value. The market crashes from 2000 to 2002. It takes you four years to earn back what you’ve lost, and finally by 2006 you’re above water. Then, in 2008 you lose it all again. You saw some good years. The market was up 28 percent in 2003, and 26 percent in 2009. But you used those big gains to earn
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