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(Salon)   You think your 401(k) will allow you to enjoy your retirement? How adorable   (salon.com) divider line 341
    More: Scary, Money Magazine, defined benefit, percent difference, equity indexes, service industry  
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19666 clicks; posted to Main » on 06 Aug 2013 at 7:12 PM (36 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



341 Comments   (+0 »)
   
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2013-08-06 04:49:57 PM
well, i plan on winning the lottery, so there.
 
2013-08-06 04:52:29 PM
No, subby. I do not think that my 401(k) will support my retirement. That's what the AK-47 is for.
 
wee [TotalFark]
2013-08-06 05:06:35 PM
You think something called the "National Pension Rights Council" will speak objectively about non-pension retirement options?  How adorable.
 
2013-08-06 05:08:45 PM

FlashHarry: well, i plan on winning the lottery, so there.


Don't bother - I already purchased the Powerball winner for tomorrow night.
 
2013-08-06 05:54:56 PM
I will sew to support myself until my fingers fall off.
 
2013-08-06 05:58:31 PM
The fundamental issues are simple:

1) People don't put enough aside for retirement; and
2) Fees will eat an enormous amount of your returns if you're not careful.

A 401(k) is fine, as far as it goes. You should be maxing it if you can afford to. You should be maxing your employer matching contribution, if possible.  In general, you should be picking the investment alternatives with the least fee overhead possible.

When possible, you should be contributing additional monies into savings. Tax-deferred if at all possible.

When possible, you should roll your 401(k) into a self-directed IRA. From there, you can pick low-fee investments that are appropriate.

Even doing all these things, you should save more and live below your means.  Retirement is expensive, and your probably don't want to be eating catfood.

//I am a registered investment advisor. This is purely general advice and should not be taken as specific to your exact situation.
 
2013-08-06 06:25:14 PM
If the average person has put aside 12K for retirement, it's the fault of the average person, not anyone else.

And really, a puny $1M is the target number?  I'm planning on having at least double that....
 
2013-08-06 06:34:21 PM

Rustico: The fundamental issues are simple:

1) People don't make enough money to put enough aside for retirement; and
2) Fees will eat an enormous amount of your returns if you're not careful.

A 401(k) is fine, as far as it goes. You should be maxing it if you can afford to. You should be maxing your employer matching contribution, if possible.  In general, you should be picking the investment alternatives with the least fee overhead possible.

When possible, you should be contributing additional monies into savings. Tax-deferred if at all possible.

When possible, you should roll your 401(k) into a self-directed IRA. From there, you can pick low-fee investments that are appropriate.

Even doing all these things, you should save more and live below your means.  Retirement is expensive, and your probably don't want to be eating catfood.

//I am a registered investment advisor. This is purely general advice and should not be taken as specific to your exact situation.


FTFY
 
2013-08-06 06:38:07 PM
If your employer matches and you don't use your 401k then you are a fool. For me it's like a 50% return, immediately. And Fidelity is pretty fair with fees.

I will hit ~ 1 million by the time I retire, but chances are I'll need double by then.

/employer matches 50% up to 6%
 
2013-08-06 06:38:44 PM

Rustico: The fundamental issues are simple:

1) People don't put enough aside for retirement; and
2) Fees will eat an enormous amount of your returns if you're not careful.

A 401(k) is fine, as far as it goes. You should be maxing it if you can afford to. You should be maxing your employer matching contribution, if possible.  In general, you should be picking the investment alternatives with the least fee overhead possible.

When possible, you should be contributing additional monies into savings. Tax-deferred if at all possible.

When possible, you should roll your 401(k) into a self-directed IRA. From there, you can pick low-fee investments that are appropriate.

Even doing all these things, you should save more and live below your means.  Retirement is expensive, and your probably don't want to be eating catfood.

//I am a registered investment advisor. This is purely general advice and should not be taken as specific to your exact situation.


I dunno, man.  Some of those Fancy Feast cans look pretty damn good, actually.
 
2013-08-06 06:53:58 PM

azmoviez: If your employer matches and you don't use your 401k then you are a fool.


Would you like some tax deferred free money?
No way! I've got to have the latest_________________fill in blank with depreciating asset.
 
2013-08-06 07:00:05 PM
I don't really plan on retiring because I had the foresight to choose a profession  that I enjoy so I don't have to worry about spending my last couple decades staring at the wife and taking the occasional cruise like my dad's doing now.
 
2013-08-06 07:15:28 PM

Mugato: I don't really plan on retiring because I had the foresight to choose a profession  that I enjoy so I don't have to worry about spending my last couple decades staring at the wife and taking the occasional cruise like my dad's doing now.


You're planning to stay with your wife? I'm planning to push mine off a cliff in her wheelchair, then use the insurance money for hookers.
 
jgi
2013-08-06 07:17:09 PM
 
2013-08-06 07:19:05 PM
Yes, I do.  The numbers seem to back that up so far.

// I'll also have a federal pension, but I'm not even factoring that in.
// I'd gladly trade that for equal net present value in my TSP.  Even at a modest discount to NPV.
 
2013-08-06 07:19:22 PM
I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.
 
2013-08-06 07:20:37 PM
"You think your 401(k) will allow you to enjoy your retirement? "

No, my fabulous oral skills will.
 
2013-08-06 07:21:14 PM

Rustico: The fundamental issues are simple:

1) People don't can't put enough aside for retirement; and
2) Fees will eat an enormous amount of your returns if you're not careful no matter what you do.


3) Banks are like casinos. Banksters love to gamble, and the odds are always in favor of the house.

FTFY
 
2013-08-06 07:21:15 PM

LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.


More about this below the orange interstate highway interchange squiggle.

img.fark.net


You probably should start something, whatever it is.
 
2013-08-06 07:21:48 PM

Wendy's Chili: People don't make enough money to put enough aside for retirement; and


Certainly that can be an issue, I'll grant you that.

I look at my father-in-law. He has a sixth-grade education, joined the merchant marines, got a job as a building maintenance guy, raised two kids, put them thru private school and college, bought a house and investment properties. I have nothing but respect for the guy. He lived WAY below his means for a long time so he could afford to not work until he collapsed.

Everybody has choices to make....
 
2013-08-06 07:21:49 PM
live fast, die young
 
2013-08-06 07:21:50 PM

Rustico: The fundamental issues are simple:

1) People don't put enough aside for retirement; and
2) Fees will eat an enormous amount of your returns if you're not careful.

A 401(k) is fine, as far as it goes. You should be maxing it if you can afford to. You should be maxing your employer matching contribution, if possible.  In general, you should be picking the investment alternatives with the least fee overhead possible.

When possible, you should be contributing additional monies into savings. Tax-deferred if at all possible.

When possible, you should roll your 401(k) into a self-directed IRA. From there, you can pick low-fee investments that are appropriate.

Even doing all these things, you should save more and live below your means.  Retirement is expensive, and your probably don't want to be eating catfood.

//I am a registered investment advisor. This is purely general advice and should not be taken as specific to your exact situation.


You sound like just the guy I should ask: Why does my retirement savings have to be invested in the stock market, which can be fickle?
 
2013-08-06 07:22:34 PM

Popcorn Johnny: My 401k has done good enough to make me happy. If it runs out, I'll go hand a bank teller a note and spend my last few years with free room and board.


I genuinely LOL'd at your post; first time for everything, I suppose.
 
2013-08-06 07:22:53 PM

LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.


If you have a 401k match, make sure you capture that. Even with the penalty for early withdrawal, it's free money.
 
2013-08-06 07:23:08 PM
No.

I suspect contributions will be taxed soon, to help make up for shortfalls in Social Security and other programs.

Not to mention changes in taxing on investments in general.

My mother's is ran out within 2 years of retirement due to unexpected medical expenses.  Luckily my step-father has a nice pension.
 
2013-08-06 07:23:39 PM

tuna fingers: LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.

More about this below the orange interstate highway interchange squiggle.

[img.fark.net image 68x26]

You probably should start something, whatever it is.


Well, I bought a house. Between area appreciation and the work I do to it, it should be a good performer for me over time. Other than that I have student loan debt - my focus is on eliminating debts now.
 
2013-08-06 07:24:08 PM
If Salon.com told me that I need to breathe to survive, I wouldn't believe them.
 
2013-08-06 07:25:05 PM
Correct me if I'm wrong here, but doesn't
On their own, the amount of money Americans have put aside for their post-work lives sounds extraordinary. According to the Investment Company Institute, the lobbying arm of the mutual fund industry, we had $20.8 trillion in retirement savings, divided between individual retirement accounts, defined contribution plans, defined benefit plans, government plans and annuity reserves.

When broken down to the individual level, those numbers add up to nowhere near enough money.


mean, at best, "we took the people who used sound retirement planning, the people who put $1 in and forgot about it, did an average and for the rest of this article pretend that represents the 'average' experience?" or, at worst, "we divided the total retirement savings by the entire population."

toraque: I dunno, man. Some of those Fancy Feast cans look pretty damn good, actually.


As long as it's served in that little crystal goblet, because anything less would be uncivilized.
 
2013-08-06 07:25:53 PM

Rustico: Everybody has choices to make....


This is certainly true, but even the story of your FIL could be rattled apart if we compared costs and wages/buying powers between things as he was forming his life and as somebody nowadays is.
 
2013-08-06 07:26:23 PM
If you don't save for retirement you're a fool (or just very poor and that's another issue). If your employer has a matching 401k and you don't invest your an idiot. If you just blindly dump money into your employer's plan without figuring out what it is that you're investing in and why you're an idiot.

This article basically boils down to people don't invest enough in their 401k or understand what they're investing in. None of that is a problem with 401ks just with the people using them. A 401k for dummies book costs like $15.
 
2013-08-06 07:26:27 PM
$12,000/year isn't enough?
 
2013-08-06 07:26:48 PM

LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.


Do something tomorrow. Put aside 2% into a 401k (assuming your employer offers it).  It's likely that you won't even notice it week-to-week. Invest it in the lowest overhead funds available (likely govt bond or market index funds).   Just do it. If your employer matches, your getting FREE money.

Please. You'll thank yourself for it down the road. At a minimum it serves as a financial safety net in case something totally unexpected happens to you.
 
2013-08-06 07:27:10 PM

LasersHurt: I'm young, so I haven't started a 401k

learned to do math yet. I'm not convinced it's the best thing I can do for 40 years.

Basically the same thing on more than one level.
 
2013-08-06 07:28:26 PM
Aha ha ha, fools! I'm not a bit worried about retirement. I plan on working until the day I die. (Unless it happens on a weekend or holiday)
 
2013-08-06 07:28:26 PM

LasersHurt: tuna fingers: LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.

More about this below the orange interstate highway interchange squiggle.

[img.fark.net image 68x26]

You probably should start something, whatever it is.

Well, I bought a house. Between area appreciation and the work I do to it, it should be a good performer for me over time. Other than that I have student loan debt - my focus is on eliminating debts now.


Houses are important, but they're not an investment like a stock. A stock is not keeping you dry, and if you sell it you don't have to immediately buy another one. If you own other properties and rent them out, that could be an investment, but YOUR house is not the same thing.
 
2013-08-06 07:28:43 PM
ITT: people who think the 401k is a godlike, eternal investment that overrules literally everything else.

Relax you nutters, I said I haven't YET, not that I never plan on investing. Any clever idiot can make up for a few years delay.
 
2013-08-06 07:28:44 PM
" ... that's without taking into account the possibility that Social Security benefits will be cut at some point in the future."

And that's the precise moment the article fell apart. Followed individual experiences that show taking advantage of employer matches and paying attention to investment options have led to many, many very healthy 401(k)s.
 
2013-08-06 07:29:23 PM
What's retirement?
 
2013-08-06 07:29:23 PM

UsikFark: Houses are important, but they're not an investment like a stock. A stock is not keeping you dry, and if you sell it you don't have to immediately buy another one.


This is why I bought a house instead of getting into financial vehicles first.
 
2013-08-06 07:29:39 PM

jestme: Why does my retirement savings have to be invested in the stock market, which can be fickle?


You shouldn't have to. Your 401k plan should have non-stock funds available. I would be VERY surprised if it didn't.
 
2013-08-06 07:30:29 PM
Oh, people actually see positive growth rates with their retirement plans? Mine has shrunk for the last four quarters, nickel-and-dimed through fees to the point of loss.
 
2013-08-06 07:30:42 PM

netweavr: $12,000/year isn't enough?


You're going to want that much just to keep a car legal and running.
 
2013-08-06 07:30:47 PM
You think your pension will allow you to enjoy your retirement?
 
2013-08-06 07:30:51 PM

LasersHurt: Well, I bought a house. Between area appreciation and the work I do to it, it should be a good performer for me over time. Other than that I have student loan debt - my focus is on eliminating debts now.


That's good. Housing historically appreciates at the same rate as inflation. It means it isn't really a good "investment" so much as it is forced savings. That's at least a step in the right direction.
 
jgi
2013-08-06 07:31:46 PM

LasersHurt: I'm young, so I haven't started a 401k yet. I'm not convinced it's the best thing I can do for 40 years.


If I could reach through this screen, grab your shoulders, and shake you... I would! Please start reading this blog. I wish it was around for me 10 years ago.

The answer to your question is: only contribute if you get an employer match and choose some sort of total market (or S&P 500 matching) index fund if possible. Whatever has the lowest expense ratio. Look into Vanguard's personal investor total market funds (VTSAX if you're starting with $10K, VTSMX if you're starting with $3K). Invest in that. Reinvest the gains. Live frugally. Save your money, build a time machine with it, and go back in time so you can give me this same advice!
 
2013-08-06 07:32:08 PM

LasersHurt: UsikFark: Houses are important, but they're not an investment like a stock. A stock is not keeping you dry, and if you sell it you don't have to immediately buy another one.

This is why I bought a house instead of getting into financial vehicles first.


Once you buy the first van by the river, the second is your "investment van."
 
2013-08-06 07:32:15 PM

Rustico: LasersHurt: Well, I bought a house. Between area appreciation and the work I do to it, it should be a good performer for me over time. Other than that I have student loan debt - my focus is on eliminating debts now.

That's good. Housing historically appreciates at the same rate as inflation. It means it isn't really a good "investment" so much as it is forced savings. That's at least a step in the right direction.


"Historically" yes, but individual markets often increase much above inflation. Not that it's a guarantee, but the real reason for buying a house wasn't the investment so much as having a house, at least first and foremost.
 
2013-08-06 07:33:02 PM
They just need to buy a 3D printer. After a year, they won't need the rest of the human race anymore and can be off the grid. 3D print food, cars, houses, clothes, warp drives, etc.

Why are you Luddites worried? Come out of the cave, Ugg.
 
2013-08-06 07:33:29 PM
It's amusing that people have been conned into believing we can have what we can't afford for our parents. Pensions are quite literally a pyramid scheme. They count on ever more people making ever more money to support those at came before.

In order to live off $150,000 a year, you need 20x that saved... Or about 4.5 million. If you assume 40 years of contributions and limited stock market gains, assume 1/30th of that a year. Anybody able to save almostv$100k a year? Start liking cat food.
 
2013-08-06 07:33:37 PM

Quantum Apostrophe: They just need to buy a 3D printer. After a year, they won't need the rest of the human race anymore and can be off the grid. 3D print food, cars, houses, clothes, warp drives, etc.

Why are you Luddites worried? Come out of the cave, Ugg.


Oh COME ON this isn't even a goddamned tech thread

jesus christ is no place safe
 
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