Retirement plan investors who became accustomed to double-digit returns year after year in the mid-to-late 1990s received a reality check over the past 10 years. Financial experts are calling the 2000s the "lost decade" of investing, because the stock market was down more than it was up during that period. Even after a spectacular rebound in 2009, the average annualized return for large company stocks from 2000 to 2009 was a dismal -0.09%.*

Even though the stock market returned a healthy 26.5% in 2009, the three-year average annualized performance for 2007 through 2009 was -5.6%.* You may need to adjust your expectations for returns, since it could be some time before the market reverts to the long-term average annual performance of 10.5% experienced during the 25-year period of 1985 through 2009.*

Moving forward

Studies show that most retirement investment portfolios experienced double-digit performance returns in 2009, regaining ground lost in 2008. Even if your account hasn't caught up yet to where it once was, your contributions to an employer-sponsored retirement plan have made a difference. Here's how:

• Systematic investing: By making regular contributions to your retirement plan, you are practicing "dollar-cost averaging," or systematic investing. Regular contributions may allow you to buy more shares at a lower price, and fewer shares at a higher price. This strategy helps you avoid overreacting to short-term market changes and can help you stay on course.**
• The rewards of saving: If you've established a solid savings habit in your retirement plan, you can build on that in future years. Your plan offers a disciplined approach to saving for retirement, automatically and conveniently.

Consider your contribution level

Because you may not be able to count on above-average market returns to boost your balance, the level of your contributions is more important than ever. Consider increasing your contribution level each year, or whenever you receive a raise. If your employer offers a matching contribution, be sure to contribute at least enough to be eligible for the maximum match.