How much has your 401(K) lost? Stock market uncertainty brings losses

OAKLAND, Calif. – U.S. stock markets had a good day Tuesday, rising an average of just over two-and-a-half percent on the hope that tariffs will be negotiated. 

The Dow was up over 1,000 points, the NASDAQ increased by almost 430 points and the S&P 500 was up about 130 points.

Nonetheless, the Dow Jones Industrial Average is looking to have its worst performance since the Great Depression almost a century ago. 

Despite some dramatic gains, most of the markets that drive retirement accounts and college savings plans have taken a plunge.

FULL VIDEO: President Trump’s tariff speech

On so-called “Liberation Day,” April 2, President Donald Trump announced higher tariffs on 57 countries, soon met with counter tariffs, sending stock markers into a tailspin.  

Former Wall Street investment banker and former Dean of Golden Gate University’s School of Business Terry Connelly sees it this way. 

“It gets quite volatile and that’s, that’s hard for the average person who is invested in stocks or bonds,” Connelly said. “It’s like trying to predict a tornado without the weather bureau.”

Average 401K losses

Local perspective:

Assuming their investments are spread across the three major stock indexes as well as bonds, here’s how much folks have lost, as of Tuesday’s close, from their 401(k) retirement accounts based on Empower Investments averages. These numbers are grouped by age.

• 20s: $11,000
• 30s: $23,000
• 40s: $47,000
• 50s: $76,000
• 60s: $74,000
• 70s: 48,000
• 80s: 43,000

Older folks, mostly in retirement, are reeling from their losses, since their ability to back fill is unlikely, and they are spending what they have.

“They’re having to take out and live on their IRA distributions,” said Connelly.

Impact on college funds

Dig deeper:

There are almost 7 million 529 college saving plans worth $508 billion. 

These plans invest in mutual funds, Exchange Traded Funds, stock funds, bond funds, and money market accounts.

If you apply the same 18% loss to the average balance of $31,000 before tariffs declined that’s about $6,000. 

For many investors, fear rules. 

“The market does not look like something that [we] can trust going forward in the short run,” said Connelly.

Nonetheless, Certified Financial Adviser Tan Phan who owns Bar Area-based Tan Wealth Management, says no one should stop contributing to their accounts, especially 401(k)s and IRAs. 

“If you would have contributed for 40 year years, more than half of the account balance in the end of the 40 years comes from the first 10 years,” Tan said.

If you have some investment cash, it’s probably a very good time to buy, Tan said.