retirement on. Thoughts?


If a 2007-ish catastrophe happened closer to when you were about to retire, how would you feel about that?



Are you comfortable with speculators partially determing how much food you can put on the table when you're an old?

5/9/2012 9:30:49 AM

ever wondered why so many older people welcome you to walmart these days?

5/9/2012 9:32:01 AM

Well what I think is

5/9/2012 9:32:16 AM

what is a 401k? this is not old school


git off mah lawn!

5/9/2012 9:37:47 AM

401k is basically an investment. All investments come with risks of loss.

5/9/2012 9:39:12 AM

^^^ lol wtf is he doing

5/9/2012 9:42:28 AM

meh. if you have most/all your 401k money in stocks when you're about to retire then you done fucked up.

also a 401k shouldn't represent the entirety of your retirement funds imo.

5/9/2012 10:01:25 AM

"Shit is a hastle" - Nas

I'm Krallum and I approved this message.

5/9/2012 10:02:10 AM

yeh, you shouldn't have a ton of high risk investments at retirement.

I think the best general plan is:

Conservative investments for your first few years of saving (get to know the ropes, learn what type of risk you're comfortable with, have slow but typically constant growth, keep pumping savings in, and since this will likely be a large chunk of savings, you can easily pull it out if needed for emergencies (with less risk of a current downturn causing issues).

then ramp up to higher risk investments, say 70/30 to start your money making money. then every 10 years or so, change the ratio to say 60/40, then 50/50, etc. so you're slowly getting back into more stable investments, but still have enough in high risk to gain good earnings.

by the time you're in your mid-50s or so, you should probably be closer to 30/70 or even lower high risk so that in case shit happens, you've got some time to find more money.

I don't mean these ratios/ages to be absolute, but just as a general trend. And this assumes your investments did quite well such that you can start lowering risk in your mid-50s.

[Edited on May 9, 2012 at 10:15 AM. Reason : .]

5/9/2012 10:14:24 AM

waiting for face to show his face in this thread

[Edited on May 9, 2012 at 10:22 AM. Reason : dyswidt?]

5/9/2012 10:21:30 AM

so when you are nearing retirement....

lowerhighrisk = doubleplusgood ?

5/9/2012 10:21:41 AM

Quote :

"If a 2007-ish catastrophe happened closer to when you were about to retire, how would you feel about that?"

If you were an intelligent investor, you wouldn't have all your money in the market while so close to your retirement. That is stock market 101.

The stock market is what made all these baby boomers wealthy in the first place, and now they are gonna bitch about it when they are the ones who put us in this mess in the first place by irresponsibly purchasing homes they couldn't afford.

They shouldn't be too worried. They've got medicare and medicaid for the next 15-20 years. We are the ones who are fucked. And a responsibly invested 401 or IRA won't be enough for us to retire comfortably on.

5/9/2012 10:29:47 AM

the investment vehicle is fantastic, the investors knowledge is the reallly risky part. Companies should (and alot are starting to) offer periodic investment seminars/reviews to ensure employees are invested properly for thier age/goals. or at the very least, steer less savy employees to the lifepath funds, so the never really have to worry all that much (even though many of them were just as hard hit).

Still can't beat the tax benefits and employer matching provisions (where offered), especially when you consider that just offering 401k and similar plans are proven to increase the level of retirement savings in the first place.

5/9/2012 10:38:20 AM

yeah, as you get older your stocks/bonds/cash spread needs to be increasingly heavy on the bonds/cash side.

5/9/2012 10:40:19 AM

A majority of the time, the employee match is the best investment in the portfolio. Its free money. You can't beat that.

5/9/2012 11:09:34 AM

I do not trust 401k's only way I participate is if there is a match.

5/9/2012 11:17:09 AM

Don't trust? You can allocate the money wherever you want right?

5/9/2012 11:19:09 AM

if the company doesn't match, a 401k is still basically an IRA with an increased yearly contribution limit

5/9/2012 11:20:44 AM

I need to get more involved with this, honestly. I've let corporate dictate allocation since I started here. Too wrapped up in drugs, girls, and video games to put forth the effort to really understand the system. I guess its probably time to grow up.

5/9/2012 11:26:06 AM

I agree with most of the posts in this thread. However I would like to add my 2 cents:


I work with 401Ks....that's my job, 401k specialist. And it drives me crazy to see how many people our age are uneducated about the benefits of participating in a 401k plan if it's offered. Especially the customers I deal with....the company is mainly people between 18-35....I'd say 40% don't participate at all, 50% participate but treat their account like a checking account and get pissed off if they can't withdrawal "their" money....and the other 10% actually participate, save, and invest their money with an educated plan. And the worst part is the company I deal with does a $ for $ match up to 6%....not the best in the market, but pretty Damn good....and these people who aren't participating are not only not saving for retirement (since 401k will likely be the only retirement vehicle that many of them will have), but they are missing out on thousands of dollars of FREE money from their company!

Needless to say, learn about your benefits and use them!!!

5/9/2012 11:30:49 AM

Quote :

"Don't trust? You can allocate the money wherever you want right?"

Most corporate 401ks are participant driven but there are certainly some small businesses who offer lower cost funds only, though the funds themselves are probably highly diversified (think lifepath).

5/9/2012 11:30:55 AM

Quote :

"I do not trust 401k's only way I participate is if there is a match."

what kind of tinfoil hat shit is that?

i assume you keep all of your money in a mattress or some shit?

5/9/2012 11:33:30 AM

Just keep saving up down payments and buying rental properties.

5/9/2012 11:41:06 AM

While I don't necessarily disagree with you, real estate investments are subject to inherent risk just like anything else. And, real estate should be a portion of your protfolio no matter what your overall strategy is.

5/9/2012 11:54:19 AM

Real estate isn't liquid.

5/9/2012 1:00:19 PM

unless you buy a pond

OH

5/9/2012 1:05:22 PM

Most of the good points have already been made but there are some additional risks that most people aren't aware of.


#1 Bond funds aren't exactly "safe". Bond funds got destroyed in 2008 (some were down 50%) and bond funds could get destroyed again if rates rise (bond prices go down), a credit crisis flares up again, and/or investors iniate mass redemptions.


#2 No 401k plans that I'm aware of offer a cash position. You must have some type of "stable value" or money market fund option. But those are not guaranteed either. Remember the crisis in 2008 where one stable value fund was at risk to lose like 10%? I believe it was Ford. The stable value fund is only as stable as the underlying insurance companies guaranteeing the fund. Money market funds are also not guaranteed and a few have "broken the buck" in the past.


The effects of 2008 were drastically muted by all the government guarantees/stimulus. This has led people to think the water is safe. In actuality, we have engineered a much bigger forthcoming crisis.

5/9/2012 1:23:20 PM

Quote :

"I'd say 40% don't participate at all, 50% participate but treat their account like a checking account and get pissed off if they can't withdrawal "their" money....and the other 10% actually participate, save, and invest their money with an educated plan."

Guaranteed, the other 90% will complain nonstop when the 10% who were actually saving end up with lots of money in their old age, and the others don't.

"It isn't FAIR!!"

5/9/2012 1:32:21 PM

Quote :

"The effects of 2008 were drastically muted by all the government guarantees/stimulus. This has led people to think the water is safe. In actuality, we have engineered a much bigger forthcoming crisis."

This is what I wonder about(not saying its true, but it could be)..I do not really know enough about investment accounts. I do feel pretty strongly that there is no accountability for shitty investments/unreasonable risks. Since pretty much no one has been sent to prison for wiping out all the people a few years ago and the federal government is throwing all its resources at prosecuting clowns like John Edwards I just feel like its a bunch of crap and the people really making money have nothing to lose.

5/9/2012 2:07:06 PM

I asked my finance guy if my 3% return last year was sub-par. He said he'd fucking love that since his 401k "gained" -2%.

5/9/2012 2:32:41 PM