I left my job 13 years ago with $80,000 in a 401(k) plan and $500 a month pension. Two years ago the company told me that I had to get money for pension. I had already lost $45,000 of my 401(k) due to market drops.

When I cashed in my pension I got $50,000 from it. I rolled the remainder of 401(k)s plus pension into a 401(k) with a financial adviser with a total investment of $100,000.00.

I figure that I am down $100,000 over the past 13 years as my 401(k) continues to drop. I think that it would be better to pay off my house with the 401(k) money and put my house payment money under a mattress to at least have a potential profit when I sell my house All I have done is lose money with a 401(k) plan.

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    You can't have a "401(k)" with a financial advisor, 401(k) plans are offered by employers to their employees and you are not an employee of your financial advisor. Is it instead an IRA? Or did you, God forbid, buy a tax-deferred annuity with the money (vastly beneficial to the person (financial advisor) who sold it to you but a poor choice for you)? – Dilip Sarwate Feb 10 '19 at 14:34
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    @DilipSarwate: Even a tax-deferred annuity would not be as bad as what OP describes -- it would lose out on gains which is a huge missed opportunity, but it wouldn't actually decline in value. – Ben Voigt Feb 10 '19 at 16:50
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    Honestly, I think the only ways you could lose money are if your financial advisor is ripping you off, or if you insist on putting money in speculative "investments". Move the IRA/401k to decent index funds with a reputable company like Vanguard or T. Rowe Price. – jamesqf Feb 10 '19 at 18:03
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    For perspective, here is an article written this week: "Last year witnessed the end of a nine-year run for stocks that saw the S&P 500 deliver a remarkable 259% in total returns and gain 10% or more in seven of those nine years". – Pete B. Feb 11 '19 at 11:54
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    To follow up on comments about how the 401k (or IRA) might be losing money... are you making withdrawals regularly (perhaps to live on)? That $500/month from the pension presumably was going toward living expenses, so it has to be made up from somewhere. That would account for a steady drop in account balance better than a shady financial advisor (which is the next best option). – Istanari Feb 11 '19 at 15:56

A 401K can be in any type of security. So a 401K doesn't fundamentally lose value but what can lose value is the choice of securities. For instance, a 401K could be in six-month corporate bonds or in 2-year government bonds if a more stable investment is wanted.

All the 401K needs to do as a minimum is match inflation, avoid taxes, and compound. However, to be better than paying off a mortgage, the 401K needs to outperform the mortgage rate. Well, the 401K does avoid taxes and that's a bump up.

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