How Much Have 401(k) Plans Lost This Year?

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Depending on risk and diversification, 401(k) plans have lost between 4% and 20% so far this year. Unlike most other periods when stocks lost money, bonds have not defended well this time. Target-date funds (TDF) have a wide spread of performance for those near retirement.

All asset classes except commodities lost money in the first half of 2022. U.S. stocks lost the most, plummeting more than 21%.

How have 401(k) investments fared? The answer to this question usually depends on risk and diversification, but not so this year unless you managed risk with cash.

Traditionally, risk has been controlled with bonds, which have not protected this time, with U.S. bonds losing 10% and foreign bonds losing 17.7%. Going forward, bonds will continue to lose money as the Fed takes the brakes off of its zero interest rate policy (ZIRP).