My 401k statements show a "Personal Rate of Return" (also called Internal Rate of Return), and I am curious what this actually means.
Does this indicate how my funds are performing in the market? Or is it just an expression of how much I contributed?
I am interested in the former, so I can evaluate the funds I have chosen. I'm not as interested in the latter, as I plan to simply contribute the max amount my employer will match.
My 401k provider says that their Internal Rate of Return calculation "considers the account balance at the beginning of the period, any contributions, any withdrawals, any growth or decline in the value of the account’s assets, and the period’s ending balance."
Does this mean that IRR is just a fancy way of calculating end balance divided by beginning balance?