Better off with long-term retirement

Is this your IRA account this holiday season? Let’s assume as an investor you had $100,000 in your IRA account a few months ago. Today, if your investment was down 10 percent to $90,000, you'd need to earn 11 percent to get back even.

If your investment was down 20 percent to $80,000, you'd need 25 percent to get back even.

If your investment was down 30 percent to to $70,000, you'd need to earn 43 percent to get back even.

If it was down 40 percent to $60,000, you'd need 67 percent to make par.

And if your investment dropped 50 percent to $50,000, you'd need to generate 100 percent to recoup the losses.

A lot of investors lost a ton of money in the last few months because of the financial markets' downswing. If your account is now down a loss of 30 percent, it would take you a whopping 18 years to recover in an all-cash portfolio (2 percent return assumed).

It would take you 7.3 years to recover in an all-bond portfolio (5 percent return assumed).

It would take 4.7 years to recover in a 60/40 portfolio (stocks bonds 8 percent return assumed).

It would take 3.7 years to recover back to even in an all stock portfolio (10 percent return assumed).

The rates of return are for illustrative purposes only and are hypothetical in nature because we have no idea what the investments will actually earn.

It is important to note that if you lose money in your account, it takes awhile to get whole again. If you are in retirement or near retirement, you should choose investments that have little or no risk to principal. That's because it takes along time to recoup losses in your retirement account.