Nest Egg Rebound: Surging Stocks Lift 401(k) Accounts

For much of this year, Melissa Roukous couldn't bear to read her 401(k) statement. The stock market collapse of 2008 drained more than 35 percent from her retirement account and steep market declines earlier this year gave her little reason for optimism.

The stock market's dramatic rise is not only making bankers and traders giddy. It's also putting a smile on the faces of millions of Americans whose retirement accounts were decimated in the wake of a fierce economic collapse.

(ABC News Photo Illustration)

"For a while, I felt hopeless about my future," said the marketing executive from Boca Raton, Fla.

But, with the stock market recovering more than 3,400 points since bottoming out in March, Roukous, 39, said her fear of peeking at her 401(k) balance sheet has waned.

"I am so relieved that my balance is finally going back up," she said.

Her 401(k) is now slightly ahead of pre-bust levels. "The upturn in the market makes me feel more confident about my future," she said

The stock market's dramatic rise is not only making bankers and traders giddy. It's also putting a smile on the faces of millions of Americans whose retirement accounts were decimated in the wake of a fierce economic collapse .

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About $2.7 trillion was lost in 401(k) and individual retirement accounts between September 2007 and May of 2009, according to the Urban Institute , a Washington-based independent research group.

That level of investment loss won't be recovered any time soon and economic uncertainty portends a difficult future for many 401(k) accounts, financial experts say.

But the major stock indexes have rebounded by 50 percent or more since early March, and the economy is showing tangible signs of stabilizing. And that is spelling relief for anyone who watched their 401(k) accounts falter.

The Employee Benefit Research Institute and the Investment Company Institute recently released a report showing that many investors' 401(k) account balances have risen above the levels recorded at the beginning of 2008

"You had millions of people nearing retirement who were in a panic," said Dennis Suckstorf, a financial planner with Financial Advantage in Columbia, Md. "Many of them still are, but a stabilizing stock market will ease some of those fears."

The Dow Jones Industrial Average, one of the most-watched markers of the financial world, closed above 10,000 points Wednesday, underscoring the stock market's recovery from last year's financial crisis.