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(LA Times)   New report says the 401(k) system leaves most people with inadequate retirement savings. That report is called your 401(k) statement   (latimes.com) divider line 206
    More: Fail, pension plans, saves, Economic Policy Institute  
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1572 clicks; posted to Business » on 06 Sep 2013 at 11:38 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



206 Comments   (+0 »)
   
View Voting Results: Smartest and Funniest
 
2013-09-06 08:53:57 AM
Yeah, it's The System's fault you can't save any money.
 
2013-09-06 10:56:54 AM
I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...
 
2013-09-06 11:09:03 AM
Well that made me feel a little bit better about my economic situation.

Wait, the fact that impoverished octogenarians are going to be lining up outside my box/soup kitchen fighting over dog food and gruel doesn't make me feel good at all.
 
2013-09-06 11:42:36 AM
Its a good thing that all I want to do when I retire is drink beer, watch tv and occasionally go bowling or to a strip club.

Im all set.
 
2013-09-06 11:46:19 AM

brap: Wait, the fact that impoverished octogenarians are going to be lining up outside my box/soup kitchen fighting over dog food and gruel doesn't make me feel good at all.


You can take bets on who's going to win.
 
2013-09-06 11:53:55 AM
I'm on board with SS, 401k, Roth IRA, health insurance and two pensions. I think I'll be OK for retirement but I just hope I don't get laid off before I choose to retire. Sweating out the last several years.
 
2013-09-06 11:54:41 AM
Yes, let's return to the magically sustainable world of pensions. That will solve everything.
 
2013-09-06 12:06:31 PM
I have an awesome 401K with about 500 dollars in it.

Retirement, here I come!
 
2013-09-06 12:09:26 PM

You're the jerk... jerk: Yes, let's return to the magically sustainable world of pensions. That will solve everything.


Oh, and why is that, pray tell? Because businesses want to give more money to shareholders, executives, CEOs rather than the employees who make the businesses run?

Expect the next benefits to lose from employers to be, in no particular order: Health insurace, paid vacation days, pay raises.
 
2013-09-06 12:12:21 PM
Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

www.creditwritedowns.com
 
2013-09-06 12:15:23 PM

HeadLever: Has nothing to do with this. Personal responsibiltiy is only for others, amiright?


Your first mistake is assuming that the graph has something to do with personal responsibility. It's still very much the system if wages haven't increased in the entire timespan the graph represents, while the cost of everything else has.
 
2013-09-06 12:17:11 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?


Frontline had a great show that talked about retirement/401K.

They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.
 
2013-09-06 12:18:35 PM

You're the jerk... jerk: Yes, let's return to the magically sustainable world of pensions. That will solve everything.


There has been talk of the government nationalizing all 401ks and replacing them with government bonds that pay a predictable interest.
 
2013-09-06 12:21:55 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

[www.creditwritedowns.com image 570x371]


How does cost of living and wages figure into that?
 
2013-09-06 12:23:12 PM

mcreadyblue: HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

Frontline had a great show that talked about retirement/401K.

They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.


The employee must be getting a very large kickback if the only plans available in then 401k have high fees. The 2 funds I put my 401k money in have maintenance fees of less than .2% and there are a couple of options with less than that.

Also, the biggest gain the the employee contribution. For example, my employee matches 100% up to 5% of my paycheck so I'm only using the 401k for that 100% return on my investment. The market return on top of that is just icing on the cake.
 
2013-09-06 12:23:12 PM

AirForceVet: Because businesses want to give more money to shareholders, executives, CEOs rather than the employees who make the businesses run?


Some of the worst performing and must underfunded pensions are in the public sector.  Also don't forget that private pensions are insured, while public pensions are generally not.  Also, I belive that private pensions need to be funded upfront, whereas public entitites can promise whatever thier alligator mouth spouts, regardless if they are supporting a hummingbird ass or not.
 
2013-09-06 12:25:48 PM

HeadLever: AirForceVet: Because businesses want to give more money to shareholders, executives, CEOs rather than the employees who make the businesses run?

Some of the worst performing and must underfunded pensions are in the public sector.  Also don't forget that private pensions are insured, while public pensions are generally not.  Also, I belive that private pensions need to be funded upfront, whereas public entitites can promise whatever thier alligator mouth spouts, regardless if they are supporting a hummingbird ass or not.


Public sector pension funds have been raided by politicians for various reasons and that's the biggest reason why there are underfunded. Also, private sector pension funds have been disappearing faster than wage increases.
 
2013-09-06 12:31:05 PM

rumpelstiltskin: Yeah, it's The System's fault you can't save any money.


While this may be true, it will end up being your problem.  Rather than saying FU, I got mine, you should be looking for solutions.
 
2013-09-06 12:33:16 PM
When Obama launches those 200 cruise missiles at Syria, thats 91,000 monthly Social Security payments. Not a problem to launch those missiles. Fix Social Security? Man, it's broken beyond repair. Wars are easier to fight, then dealing with domestic problems.
 
2013-09-06 12:36:30 PM

Pick: When Obama launches those 200 cruise missiles at Syria, thats 91,000 monthly Social Security payments. Not a problem to launch those missiles. Fix Social Security? Man, it's broken beyond repair. Wars are easier to fight, then dealing with domestic problems.


Typical lib.  Rather than defending America from terrorism it's all "gimme gimme gimme my government money check."  You need to take some personal responsibility for your own retirement rather than relying on the government to take care of you.
 
2013-09-06 12:38:27 PM

ddam: Public sector pension funds have been raided by politicians for various reasons and that's the biggest reason why there are underfunded.


That is part of the issue, but not all.  Some of it is just poor planning and promises that they could not keep.
 
2013-09-06 12:40:50 PM

ddam: Also, private sector pension funds have been disappearing faster than wage increases.


That is true as well.  It is part of the ongoing struggle that we are having trying to be competitive in the world economy.  The pressure put on small and medium sized buisnesses (and by extension the middle class) is huge.  The on-going belt tightening does not bode very well for private pension plans or 401(k)s
 
2013-09-06 12:43:24 PM

HeadLever: AirForceVet: Because businesses want to give more money to shareholders, executives, CEOs rather than the employees who make the businesses run?

Some of the worst performing and must underfunded pensions are in the public sector.  Also don't forget that private pensions are insured, while public pensions are generally not.  Also, I belive that private pensions need to be funded upfront, whereas public entitites can promise whatever thier alligator mouth spouts, regardless if they are supporting a hummingbird ass or not.


That insurance on the private pensions is, as of November of 2012, a possessor of $85 billion of assets with $112 billion of liabilities.
 
2013-09-06 12:45:08 PM
"But the 401(k) system has been a dud for the vast majority of Americans, with women, young people and minorities among the broad groups whose financial well-being is at risk because they're not saving enough. "

I think I'm seeing the problem here...

"For middle-income earners, the median balance in 401(k) plans as of 2010 was a lowly $23,000, according to the study. "

So assuming they're talking about people in their mid-40s, that means 15 years of savings.  $23K over 15 years is 1,500 a year or $60 per bi-weekly paycheck and that is without any interest.

Conversely, after a quick calculation, saving just $100 a paycheck in that same timeframe at 8% average yields $65,000.  Take that out another 20 years, and the total is $413,500.  It's not that the system is failing, it's that people are short-sighted.  Is there a reason why they don't teach a semester of personal finance in high school?
 
2013-09-06 12:46:46 PM
I've been saving for 25 years, have 300K and my monthly income from that is probably 300 a month. 25 years ago, the investment company and HR was telling people that if they started at 21, they'd be millionaires at 40. So, yeah. Pretty much. Once I seriously sat down and did the math, I started paying down the house. At least I won't have to make the choice of rent or cat food.
 
2013-09-06 12:49:39 PM

dsmith42: That insurance on the private pensions is, as of November of 2012, a possessor of $85 billion of assets with $112 billion of liabilities.


You wouldn't happen to have a link to that source info, would you?  I would like to get more info on the accounting here.
 
2013-09-06 12:51:03 PM

AngryDragon: Is there a reason why they don't teach a semester of personal finance in high school?


Make it manditory to listen to the Dave Ramsey radio show for a week.
 
2013-09-06 12:55:28 PM

rumpelstiltskin: Yeah, it's The System's fault you can't save any money.


Well yeah, kind of.

Even if you can they've got numerous schemes to cut a nice cut of anything you're saving.
 
2013-09-06 12:56:25 PM

HeadLever: dsmith42: That insurance on the private pensions is, as of November of 2012, a possessor of $85 billion of assets with $112 billion of liabilities.

You wouldn't happen to have a link to that source info, would you?  I would like to get more info on the accounting here.


Sure, here you go:

http://articles.washingtonpost.com/2012-11-16/business/35505545_1_pb gc -premiums-pension-plans-troubled-pension-funds

I tried to go directly to the PBGC website directly, but for some reason it would not load for me. But it seems to be working now.
 
2013-09-06 12:58:02 PM

mcreadyblue: They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.


They tell you what the fees are right upfront. As a general rule, stick with index funds and this won't happen.
 
2013-09-06 01:00:27 PM

mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...


The right wing answer to someone who has worked hard enough to own two houses outright is to call them lazy on the basis they are doubting if they have saved enough to retire?  I think I'm missing the joke.  I'd think it more likely a lefty who could find lots of room to throw accusations your way and then follow up with an incredibly clever remark concerning your obvious need for a tax cut.
 
2013-09-06 01:00:28 PM

dsmith42: Sure, here you go:

http://articles.washingtonpost.com/2012-11-16/business/35505545_1_pb gc -premiums-pension-plans-troubled-pension-funds

I tried to go directly to the PBGC website directly, but for some reason it would not load for me. But it seems to be working now.


Cool, thanks.
 
2013-09-06 01:01:15 PM

dsmith42: Sure, here you go:

http://articles.washingtonpost.com/2012-11-16/business/35505545_1_pb gc -premiums-pension-plans-troubled-pension-funds

I tried to go directly to the PBGC website directly, but for some reason it would not load for me. But it seems to be working now.


A failing government program? Odd that.
 
2013-09-06 01:02:31 PM

doczoidberg: I have an awesome 401K with about 500 dollars in it.

Retirement, here I come!


You are doing fine, assuming you are 15.
 
2013-09-06 01:07:59 PM

MugzyBrown: A failing government program?


The only reason that it is 'failing' is that congress will not give it the authority to charge the premiums that is required to balance assets and liabilities.  So far, they have not had to have any bailout from taxpayers, but if they allow the asset-liability gap to continue on its current path, that will only become a matter of when.

overall, it looks to be an easy fix.  Thier hands are tied in its implementation, though.
 
2013-09-06 01:09:31 PM
The biggest problem with the 401(k) system is the average person does not make enough in the first place to set aside a meaningful amount of money to retire with.  All that is going to happen is they are are at retirement age, they are going to take the $50k they saved up over 30 years as a distribution and live off of social security and medicare for the rest of their lives.

Combine that with theability to take a loan on the 401(k) account, which destroys earnings potential, and its no wonder that Americans in general, are farked for retirement.
 
2013-09-06 01:10:59 PM

HeadLever: The only reason that it is 'failing' is that congress will not give it the authority to charge the premiums that is required to balance assets and liabilities


And this is why gov't programs fail.

They cannot react to the marketplace because they're not in it.
 
2013-09-06 01:13:55 PM
Just in case anyone was curious ... here is a 401(k) savings calculator that is handy

http://www.cchwebsites.com/content/calculators/Retire401k.html
 
2013-09-06 01:18:28 PM

Minarets: The biggest problem with the 401(k) system is the average person does not make enough in the first place to set aside a meaningful amount of money to retire with.  All that is going to happen is they are are at retirement age, they are going to take the $50k they saved up over 30 years as a distribution and live off of social security and medicare for the rest of their lives.

Combine that with theability to take a loan on the 401(k) account, which destroys earnings potential, and its no wonder that Americans in general, are farked for retirement.



I'll disagree with that.  They make plenty of money, they just choose to spend it on other things.  A 200 to 500 dollar car loan, 150 to 250 bucks a month for TV and Internet and a smart phone, 100 to 200 bucks a month in Credit Card interest, 100 bucks a month for beer, 200 bucks a month for eating out, etc.

Say I save $150 a month in an IRA at 8% for 40 years.  That is a bit more than 500K in savings. It doesn't take much to save some money in the future.  What it does take is discipline.  That is what most folks are missing - not money.
 
2013-09-06 01:20:25 PM

MugzyBrown: They cannot react to the marketplace because they're not in it.


They can react fine.  They have requested as much.  However, since they don't have the authority to make the change (congress does), they utlimtatly cannot control the situation they are in.
 
2013-09-06 01:23:42 PM
The worst part about this, as usual the people who have saved and have been responsible will have to step in and help those who blew through their salary every month without saving.

I don't make big money, but I've been able to put a nice % aside every month, and I have a mortgage and a kid.

They'll change the tax laws to keep SS afloat for the irresponsible people even though for 20 years people have been saying SS isn't enough to live off of.

Same thing with the mortgage crisis and every problem.  The profitable banks and responsible homeowners got to sit back and watch their tax dollars bail out irresponsible lenders and lendees
 
2013-09-06 01:25:00 PM

HeadLever: They can react fine.  They have requested as much.  However, since they don't have the authority to make the change (congress does), they utlimtatly cannot control the situation they are in


Uhh yeah.. that's the whole point.

Gov't programs have to deal with politicians and are using other people's money.  Same reason FDIC is a joke, and NFIP is underfunded
 
2013-09-06 01:27:50 PM

MugzyBrown: Gov't programs have to deal with politicians and are using other people's money.


Acutally, with this, they are not using taxpayer money.  Their assets are from premiums from the private pension plans.  So far they have not had to use other people's money.  However, that will likely change if they need to get bailed out if the politicans fail to act.
 
2013-09-06 01:30:08 PM
I made every effort to shovel as much as I could into my retirement fund early on. Now that I've got 2 kids I've had to dial back, and stuff like this worries me. At 6.5% over the next 30 years I can hit $500,000, which would probably be enough (combined with planned pension and SS), especially if I can have my mortgage paid off by then, but adding to everything is  the fact that the prospect of paying for college for two (or more) kids is just terrifying. The financial planner we talked to recomended saving about $600 a month, per kid, to ensure we could fully fund their college education, which is just way out of our budget right now.

I'd be much happier and comfortable with a better pension option and the knowledge that SS will be more robust in the future, the whole 401k model seems like such a crapshoot.
 
2013-09-06 01:33:22 PM

MugzyBrown: HeadLever: They can react fine.  They have requested as much.  However, since they don't have the authority to make the change (congress does), they utlimtatly cannot control the situation they are in

Uhh yeah.. that's the whole point.

Gov't programs have to deal with politicians and are using other people's money.  Same reason FDIC is a joke, and NFIP is underfunded


The FDIC is perfectly fine and weathered the Great Financial crisis without any problems. They also increased the premium that they charged banks for their insurance subsequent to that crisis. But they can act without Congressional approval.

If you want to go back to the time when banks were uninsured and you could lose all your money when it went under, feel free. I hear you can get some biatching rates on CDs from the Stanford International Bank. Or stuff it in your mattress.
 
2013-09-06 01:37:19 PM

dsmith42: If you want to go back to the time when banks were uninsured and you could lose all your money when it went under, feel free


Ya know there are tons of financial institutions that have insurance that are not under the FDIC umbrella
 
2013-09-06 01:37:36 PM

HeadLever: What it does take is discipline. That is what most folks are missing - not money.


And most people are never going to get that discipline.  So that leaves three options.

1) Let 'em starve
2) Bail 'em out
3) Take away their choice and go back to a pension like system
 
2013-09-06 01:43:33 PM
mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

Ohh, I can retire just fine.

BUT

I can't retire the way I WANT to retire.

// IE, my 401k isn't going to be able to buy me a Yacht. But I won't be starving on the streets.
 
2013-09-06 01:44:15 PM

mcreadyblue: They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.


S&P 500 Index funds are your friends.  Mine has a .25% fee.

I did work at a place that went from a company that offered an S&P500 Idex fund to one that attempted to match the preformance of the S&P 500.  The fee went from something like 1/4% to 6% over night and it was the best deal.  Fortunately that only lasted about a year and a half before got a new position.
 
2013-09-06 01:44:34 PM

12349876: So that leaves three options.


Actually, that leaves about 2,419 options.  Trying to simplify it into quaint takling points is a real disservice to what this issue really represents.
 
2013-09-06 01:47:18 PM

HeadLever: Say I save $150 a month in an IRA at 8% for 40 years.  That is a bit more than 500K in savings. It doesn't take much to save some money in the future.  What it does take is discipline.  That is what most folks are missing - not money.


They are also missing a magic way to get a guaranteed 8%.  Safe investments are making less than 2%.  Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.
 
2013-09-06 01:49:39 PM
Read that as pirate pensions.
 
2013-09-06 01:49:50 PM

error 303: I made every effort to shovel as much as I could into my retirement fund early on. Now that I've got 2 kids I've had to dial back, and stuff like this worries me. At 6.5% over the next 30 years I can hit $500,000, which would probably be enough (combined with planned pension and SS), especially if I can have my mortgage paid off by then, but adding to everything is  the fact that the prospect of paying for college for two (or more) kids is just terrifying. The financial planner we talked to recomended saving about $600 a month, per kid, to ensure we could fully fund their college education, which is just way out of our budget right now.

I'd be much happier and comfortable with a better pension option and the knowledge that SS will be more robust in the future, the whole 401k model seems like such a crapshoot.


So you have successfully followed the 401K plan, are probably set to be comfortable in retirement, and you're dissatisfied?  I don't understand.  It sounds like your issue should be the insane cost of college that you can't continue with your successful plan.
 
2013-09-06 01:54:59 PM

HeadLever: 12349876: So that leaves three options.

Actually, that leaves about 2,419 options.  Trying to simplify it into quaint takling points is a real disservice to what this issue really represents.


Feel free to list them and not just claim you have them.
 
2013-09-06 01:55:57 PM
If a self-managed retirement account were a sensible way of planning for retirement everybody would just be a stock broker from day one.

I have an IRA and a 401k because I have no reasonable retirement-planning options (and I'm not leaving the paltry company match on the table), but even though I'm doing fine with both I think the whole idea is still farking retarded. If everybody were able to make money in the stock market everybody would be a goddamn fund manager. You shouldn't have to have two careers your entire life just so you can eat past 65.

401ks are particularly insidious since the only thing they actually accomplish is a better bottom line for the companies that get to cut their staffing costs.

On the flip side, it's workers' faults they let companies steal their pensions away in the first place so I'm a bit torn on who gets more ire, companies or their employees.
 
2013-09-06 01:55:58 PM

rumpelstiltskin: Yeah, it's The System's fault you can't save any money.


Actually, yes, yes it is.

And if Americans actually saved what they needed to for retirement, it'd probably send the world economy into a tailspin as even more wealth sat idle.

Imagine if every working American socked away just 10% of their income each month.  That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.
 
2013-09-06 01:56:14 PM

bark_atda_moon: HeadLever: Say I save $150 a month in an IRA at 8% for 40 years.  That is a bit more than 500K in savings. It doesn't take much to save some money in the future.  What it does take is discipline.  That is what most folks are missing - not money.

They are also missing a magic way to get a guaranteed 8%.  Safe investments are making less than 2%.  Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.


Returns are usually calculated by historical averages.  Example:

i.imgur.com

The big loss years bring things down dramatically.  Average annual return of the S&P over time is over 10%.  The key is over time.  You're saving for retirement not for next weekend's party.  That's why you save early, often, and consistently.
 
2013-09-06 01:56:21 PM

bark_atda_moon: They are also missing a magic way to get a guaranteed 8%. Safe investments are making less than 2%. Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.


If your putting money in your retirement account from age 20 to 62, and S&P 500 Index fund will be safe for 35 of those 42 years.  It is only when you get close to when you have to actually start making withdrawals is when you have to start moving money into less volatile investments.
 
2013-09-06 01:59:48 PM

bark_atda_moon: Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.


If those in their 50s and 60s were playing it safe, they would have been saving up money for the last 20 to 40 years.  I do agree when you you reach near retirement age, you need to be more conservative with your money.  Being behind in your retirement savings when you are 50 and 60 is not good from any angle.
 
2013-09-06 01:59:51 PM

skozlaw: 401ks are particularly insidious since the only thing they actually accomplish is a better bottom line for the companies that get to cut their staffing costs.


So what's with all this money in my accounts, a good portion of it is from the company match?
 
2013-09-06 02:03:19 PM

12349876: Feel free to list them and not just claim you have them.


Might want to check you hyperbolometer for a malfunction.  In any case, you simplfied talking points really dose not address the entirety of this issue.
 
2013-09-06 02:05:36 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

[www.creditwritedowns.com image 570x371]


Yeah, because everyone making less money while things cost more has nothing to do with the inability to save.  Were you born stupid or just raised that way?
 
2013-09-06 02:06:35 PM

HeadLever: 12349876: Feel free to list them and not just claim you have them.

Might want to check you hyperbolometer for a malfunction.  In any case, you simplfied talking points really dose not address the entirety of this issue.


Then please enlighten me, or just keep your holier than thou attitude with no evidence to back it up.
 
2013-09-06 02:06:59 PM

meat0918: That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.


You really think that the money just sits in a vault or an account somewhere after you invest it?  Really?
 
2013-09-06 02:11:06 PM

Kazrath: Yeah, because everyone making less money while things cost more has nothing to do with the inability to save.


It does have an impact, but it is not the entire issue here.  Things cost more becacuse folks are going into debt  more and more and have to fork over more of thier income to banks via interest.  If folks would resist the temptation of easy credit and just save what they paid in credit card interest ever month, you would see a huge uptick in that graph.

Of course, this 'easy money' mentality is a tough mindset to break.  Plus it is the last things that banks want.
 
2013-09-06 02:11:50 PM

HeadLever: If those in their 50s and 60s were playing it safe, they would have been saving up money for the last 20 to 40 years.


It is a big challenge to get people in their 20s to sign up for in the 401k program.  They're usually starting out some their at the lower end of the income levels, they tend to have more bills since they're just starting to accumulate "stuff" plus there are probably college expenses, finally,  folks in their 20's aren't good at thinking long term.
 
2013-09-06 02:15:33 PM

12349876: Then please enlighten me, or just keep your holier than thou attitude with no evidence to back it up.


You could provide incentives via the tax code to have folks save for retirement.  Bolster and expand the Roth programs.  Beat the banks with a big stick and enact policies in order to reduce their drug fueled addition to credit cards, make Dave Ramsey's program a High School course.

/just to name a couple
 
2013-09-06 02:17:34 PM

Muta: folks in their 20's aren't good at thinking long term.


Yeah, I think that dicipline is usually a word that many of them don't understand until age 30.
 
2013-09-06 02:21:10 PM

HeadLever: Things cost more becacuse folks are going into debt more and more


Or folks are going into debt more and more because things cost more and wages haven't risen in 30 years.
 
2013-09-06 02:21:11 PM

DrewCurtisJr: So what's with all this money in my accounts, a good portion of it is from the company match?


Your personal experiences are individually irrelevant to overall trends, but, ignoring that annoying little fact, I would assume you either have a very generous company match or a very poor rate of return.
 
2013-09-06 02:22:40 PM

AngryDragon: bark_atda_moon: HeadLever: Say I save $150 a month in an IRA at 8% for 40 years.  That is a bit more than 500K in savings. It doesn't take much to save some money in the future.  What it does take is discipline.  That is what most folks are missing - not money.

They are also missing a magic way to get a guaranteed 8%.  Safe investments are making less than 2%.  Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.

Returns are usually calculated by historical averages.  Example:



The big loss years bring things down dramatically.  Average annual return of the S&P over time is over 10%.  The key is over time.  You're saving for retirement not for next weekend's party.  That's why you save early, often, and consistently.


You need to factor in inflation.

rpreschern.files.wordpress.com
 
2013-09-06 02:27:57 PM

Dusk-You-n-Me: Or folks are going into debt more and more because things cost more and wages haven't risen in 30 years.


And they won't likely rise anytime soon until the rest of the world catches up to our standard of living.  With this globalized marketplace, we are in for a long slog.  I really think that this will the the new norm for the next decade or two.

However, despite that fact, household debt has fallen some in recent years.  Hopefully, this trend can continue, depsite many economist praying for increased consumer spending and loosening credit.
 
2013-09-06 02:28:38 PM

ddam: mcreadyblue: HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

Frontline had a great show that talked about retirement/401K.

They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.

The employee must be getting a very large kickback if the only plans available in then 401k have high fees. The 2 funds I put my 401k money in have maintenance fees of less than .2% and there are a couple of options with less than that.

Also, the biggest gain the the employee contribution. For example, my employee matches 100% up to 5% of my paycheck so I'm only using the 401k for that 100% return on my investment. The market return on top of that is just icing on the cake.


Can you give up the name of the funds?

Here is a link to the PBS show online :

http://www.pbs.org/wgbh/pages/frontline/retirement/view/
 
2013-09-06 02:32:23 PM

skozlaw: Your personal experiences are individually irrelevant to overall trends, but, ignoring that annoying little fact


These overall trends include people who choose not to participate in 401k programs.

 I would assume you either have a very generous company match or a very poor rate of return.

What are you talking about? The rate of return also applies to the company match.
 
2013-09-06 02:32:53 PM
 
2013-09-06 02:34:04 PM

HeadLever: 12349876: Then please enlighten me, or just keep your holier than thou attitude with no evidence to back it up.

You could provide incentives via the tax code to have folks save for retirement.  Bolster and expand the Roth programs.  Beat the banks with a big stick and enact policies in order to reduce their drug fueled addition to credit cards, make Dave Ramsey's program a High School course.

/just to name a coupl


Dave Ramsey's program is already taught in schools, it's called "Foundations in Personal Finance"
 
2013-09-06 02:35:28 PM

HeadLever: 12349876: Then please enlighten me, or just keep your holier than thou attitude with no evidence to back it up.

You could provide incentives via the tax code to have folks save for retirement.  Bolster and expand the Roth programs.  Beat the banks with a big stick and enact policies in order to reduce their drug fueled addition to credit cards, make Dave Ramsey's program a High School course.

/just to name a couple


Those would probably help a bit, but I'm thinking that would be about as effective as solving alcohol abuse by forcing people into AA.  And I personally think Dave Ramsey is too restrictive for those who are financially responsible.  Like forcing social alcohol drinkers to go sober.
 
2013-09-06 02:36:02 PM
I don't make a ton of a money for where i live, but i save 10% of my paycheck, the company matches a portion of it, and currently, its up 22% for the year.... Not sure how that's a 'dud'... Its free money, and better than what i could do at a bank or other investment plan.
 
2013-09-06 02:37:48 PM
"...and invest too conservatively to sustain themselves through old age."

Except that those of us who did take on higher risk "because you're young and you can weather any market fluctuations!" got f*cked in the ass by Wall Street selling shiat sandwiches as "moderate risk".
 
2013-09-06 02:38:29 PM

dustman81: Dave Ramsey's program is already taught in schools, it's called "Foundations in Personal Finance"


Yep, and it (or something similar) needs to be expanded to be manditory for HS graduation.
 
2013-09-06 02:40:17 PM

12349876: Those would probably help a bit,


Of course they could help.  Combine that with the rest of the 2,416 other things and we might just get this problem licked.  ;)
 
2013-09-06 02:42:38 PM

KierzanDax: Except that those of us who did take on higher risk "because you're young and you can weather any market fluctuations!" got f*cked in the ass by Wall Street selling shiat sandwiches as "moderate risk".


you only got screwed if you bailed.  Right now, the market has made back all of its losses and then some.
 
2013-09-06 02:50:14 PM

HeadLever: meat0918: That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.

You really think that the money just sits in a vault or an account somewhere after you invest it?  Really?


No, but it's not circulating in the general economy, just in the massive paper shuffling game called "Investment banking"
 
2013-09-06 02:57:42 PM

meat0918: No, but it's not circulating in the general economy,


?

So when you invest in a company, they can't take that money and expand, buy new or updated equipment, perform needed maintenance, invest in other companies, etc.?   Methinks you don't know the first thing on how buisness and investing works.
 
2013-09-06 03:03:41 PM
A company sponsored 401K plan usually has high fees.

The bottom line is this - YOU need to save for retirement early and as much as you can.  If you overspend on a house, car, boat, vacations, etc. that's your fault.

Take responsibility.   Don't forget that Medicare is only 80% insurance and you should have enough for a supplemental policy.

Get started!
 
2013-09-06 03:05:48 PM

HeadLever: Dave Ramsey


Dave Ramsey is an anti-debt fanatic who advocates making no retirement contributions if you have a credit card to pay down.

Prior to creating his bible-based1 financial advice radio- and publishing system, he made money in highly leveraged real estate speculation that went so well he had to file bankruptcy.2  He appears to be self-taught as far as his education in basic financial principles, economics, management and planning go.

He also makes projections on retirement account results using assumptions that investments will return 12% (net!) and that in retirement you can draw 8% out safely every year. He appears to never differentiate between "average" returns vs "compound" returns.

1The bible is a nice enough book but not the best basis for modern financial planning.  There are other, more recent, more finance-oriented sources that may produce better results.

2It is kinda weird how frequently some high-profile finance gurus, who advocate discipline and patience and risk avoidance for others, have a history of real estate speculation and leverage (AKA "gambling with other peoples' money") as the main source of their own wealth. Weirder still, they don't seem to advocate it for others.  But I wanna be a Rich Dad too!
 
2013-09-06 03:08:13 PM

HeadLever: Dusk-You-n-Me: Or folks are going into debt more and more because things cost more and wages haven't risen in 30 years.

And they won't likely rise anytime soon until the rest of the world catches up to our standard of living.  With this globalized marketplace, we are in for a long slog.  I really think that this will the the new norm for the next decade or two.


Try the next century or two.

And it's not that the rest of the world will catch up to our standard of living, it's that ours will fall until it matches the rest of the world, "us" being defined as the bottom 90%.

Unless the world's massively population contracts, enjoy telling your grandchildren what life was like before you became a serf.
 
2013-09-06 03:17:20 PM

error 303: I made every effort to shovel as much as I could into my retirement fund early on. Now that I've got 2 kids I've had to dial back, and stuff like this worries me. At 6.5% over the next 30 years I can hit $500,000, which would probably be enough (combined with planned pension and SS), especially if I can have my mortgage paid off by then, but adding to everything is  the fact that the prospect of paying for college for two (or more) kids is just terrifying. The financial planner we talked to recomended saving about $600 a month, per kid, to ensure we could fully fund their college education, which is just way out of our budget right now.

I'd be much happier and comfortable with a better pension option and the knowledge that SS will be more robust in the future, the whole 401k model seems like such a crapshoot.


This is something I'll never understand - why would you pay for your kids college? Let em get bootstrappy and pay for it themselves - they'll appreciate their education more and thank you later for not delivering everything to them on a platter.
 
2013-09-06 03:26:04 PM

El Pachuco: Dave Ramsey is an anti-debt fanatic who advocates making no retirement contributions if you have a credit card to pay down.


Yep,  He subscribes that debt is bad and that your income is a path to wealth so long as you can quit forking all of it over to the big banks, Sally and Freddy.

It kind of makes sense.


It is kinda weird how frequently some high-profile finance gurus, who advocate discipline and patience and risk avoidance for others, have a history of real estate speculation and leverage

Yep, he will tell you exactly how stuipid he was when he did this.   He seems to have learned from his mistakes.
 
jgi
2013-09-06 03:26:08 PM
 
2013-09-06 03:27:28 PM

rumpelstiltskin: Yeah, It's The System's fault you can't save get a job and earn any money.

FTFY.

 
2013-09-06 03:29:41 PM

El Pachuco: He appears to be self-taught as far as his education in basic financial principles, economics, management and planning go.


While he has a degree in Finance from UTenn, he will admit that most of his knowledge comes from screwing things up the first time.
 
2013-09-06 03:32:44 PM
Sometimes it's better to pay off debt when the interest on the debt is higher than the return on your investments.
 
2013-09-06 03:33:51 PM

HeadLever: El Pachuco: Dave Ramsey is an anti-debt fanatic who advocates making no retirement contributions if you have a credit card to pay down.

Yep,  He subscribes that debt is bad and that your income is a path to wealth so long as you can quit forking all of it over to the big banks, Sally and Freddy.

It kind of makes sense.


It is kinda weird how frequently some high-profile finance gurus, who advocate discipline and patience and risk avoidance for others, have a history of real estate speculation and leverage

Yep, he will tell you exactly how stuipid he was when he did this.   He seems to have learned from his mistakes.


I was skeptical at first, but when I went to the "Dave Ramsey is a Demi-God" seminar I somehow changed my mind after 17 hours of thought modification.
 
2013-09-06 03:36:39 PM

HotIgneous Intruder: rumpelstiltskin: Yeah, It's The System's fault you can't save get a job and earn any money.

FTFY.


But yet 87% have currently have jobs (if we use the U6 unemployment number).  The system must really hate that 13%.  It couldn't be the economic condition we currently find ourselves or the deficiencies of said unemployed.
 
2013-09-06 03:40:58 PM

rnld: Sometimes it's better to pay off debt when the interest on the debt is higher than the return on your investments.



For a savy individual this is a needed decision point but most people are not savy.  I would suggest not accruing any more debt, find your budget excess, apply that 50/50 to investment/savings and debt reduction.
 
2013-09-06 03:41:31 PM

The_Gallant_Gallstone: Dave Ramsey is a Demi-God


??

Maybe he is different in person.  He is pretty self-deprecating when I have listened to him.  He tells some pretty amusing stories of how dumb he has been.

For the most part his plan is pretty simple and makes sense.  I don't get the self-importance at all.
 
2013-09-06 03:55:23 PM

HeadLever: For the most part his plan is pretty simple and makes sense. I don't get the self-importance at all.


Me neither... I prefer to go "Full Copeland" for my Prosperity Gospel Needs.

Did you know that if pray to Jesus just right, I'll get a Porsche.  Some guy on the Internet is going to send me the Five Steps to Lucrative Praying.
 
2013-09-06 03:55:41 PM

mcreadyblue: ddam: mcreadyblue: HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

Frontline had a great show that talked about retirement/401K.

They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.

The employee must be getting a very large kickback if the only plans available in then 401k have high fees. The 2 funds I put my 401k money in have maintenance fees of less than .2% and there are a couple of options with less than that.

Also, the biggest gain the the employee contribution. For example, my employee matches 100% up to 5% of my paycheck so I'm only using the 401k for that 100% return on my investment. The market return on top of that is just icing on the cake.

Can you give up the name of the funds?

Here is a link to the PBS show online :

http://www.pbs.org/wgbh/pages/frontline/retirement/view/


About 60% of my 401K is in Fidelity LifePath Index 2045 Fund Q which has an expense ratio (gross) of 0.12%
I have about 30% in Fidelity Stable Value Fund which has an expense ratio (gross) of 0.03%

If you have your 401K invested in any fund that has fees and expenses higher than 0.20% then you better lood for an alternative or ask your company to switch investment firms. Some is getting a kickback if all available funds have fees in the 5-6% range or higher.
 
2013-09-06 03:56:12 PM

rnld: Sometimes it's better to pay off debt when the interest on the debt is higher than the return on your investments.


From a purely financial standpoint yes. However I've seen many cases of people putting of participating in retirement plans until (credit cards are paid, student loans, saving for down payment, etc...) then something unexpected happens and there's always something, and they delay it even further because retirement is so far off.
 
2013-09-06 03:58:17 PM

AngryDragon: error 303: I made every effort to shovel as much as I could into my retirement fund early on. Now that I've got 2 kids I've had to dial back, and stuff like this worries me. At 6.5% over the next 30 years I can hit $500,000, which would probably be enough (combined with planned pension and SS), especially if I can have my mortgage paid off by then, but adding to everything is  the fact that the prospect of paying for college for two (or more) kids is just terrifying. The financial planner we talked to recomended saving about $600 a month, per kid, to ensure we could fully fund their college education, which is just way out of our budget right now.

I'd be much happier and comfortable with a better pension option and the knowledge that SS will be more robust in the future, the whole 401k model seems like such a crapshoot.

So you have successfully followed the 401K plan, are probably set to be comfortable in retirement, and you're dissatisfied?  I don't understand.  It sounds like your issue should be the insane cost of college that you can't continue with your successful plan.


Which is why you may need to explain to your kids:

Daddy/Mommy can't afford to pay for you school. We can help, but we can't afford all of it. Then, teach them about debt (school, CC, cars, mortgages, etc), saving, living within their means, planning for the future.
 
2013-09-06 03:58:55 PM

DrewCurtisJr: doczoidberg: I have an awesome 401K with about 500 dollars in it.

Retirement, here I come!

You are doing fine, assuming you are 15.


This is fark. Not reddit.
 
2013-09-06 03:59:24 PM

meat0918: And if Americans actually saved what they needed to for retirement, it'd probably send the world economy into a tailspin as even more wealth sat idle.

Imagine if every working American socked away just 10% of their income each month. That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.


What do you suppose happens to retirement savings when the account holder retires?
 
2013-09-06 04:01:05 PM

error 303: I'd be much happier and comfortable with a better pension option and the knowledge that...


...the company that owns and manages the pension account could someday go tits up, or management could decide to loot it for yacht money, and I'd be SOL.
 
2013-09-06 04:01:34 PM

meat0918: rumpelstiltskin: Yeah, it's The System's fault you can't save any money.

Actually, yes, yes it is.

And if Americans actually saved what they needed to for retirement, it'd probably send the world economy into a tailspin as even more wealth sat idle.

Imagine if every working American socked away just 10% of their income each month.  That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.


Is that a reason you can't save, or an excuse for not saving?
What, in any thing you've said, could allow me to conclude: "therefore, I cannot save."
 
2013-09-06 04:02:51 PM

KierzanDax: "...and invest too conservatively to sustain themselves through old age."

Except that those of us who did take on higher risk "because you're young and you can weather any market fluctuations!" got f*cked in the ass by Wall Street selling shiat sandwiches as "moderate risk".


If only there was some sort of risk management technique that mixes a wide variety of investments within a portfolio. To ensure that you don't have all your eggs in one basket.
 
2013-09-06 04:04:22 PM

The_Gallant_Gallstone: Me neither... I prefer to go "Full Copeland" for my Prosperity Gospel Needs.


Ah, so you are a anti-religious bigot.  I see now.  Sorry, I mistook you for someone that was honestly discussing the topic.
 
2013-09-06 04:05:13 PM

meat0918: That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.


Also, why would you imagine money put away in an INVESTMENT ACCOUNT be sitting stagnant and not circulating in the economy?

It should be evident to you by now you haven't a single gotdamned clue what you're talking about.
 
2013-09-06 04:09:21 PM

mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...


And when the hell did becoming an expert money manager become a requirement for having a decent old age? Why shouldn't being good at what you are good at be enough?
 
2013-09-06 04:12:26 PM

GoldSpider: Also, why would you imagine money put away in an INVESTMENT ACCOUNT be sitting stagnant and not circulating in the economy?


I had to scratch my head on this as well.  I guess it is the same thining that if you put $50 in a saving account, the bank puts an actual Grant in the vault on a shelf with your name on it.
 
2013-09-06 04:12:34 PM

Problem: 100% of Americans need a source of funds for retirement after working and contributing to the economy for 40-50 years.


Solution: 1935 Social Security is created, but is never intended to be the sole source of retirement funds.  Between 1945 and 1980 or so, public- and private-sector unions are notably successful in negotiating defined-benefit retirement plans (pensions) for average US workers at nearly all levels of income.  Businesses experience steadily rising production efficiencies, with rising profits, and can afford to pay for pension plans. Progressive taxes pay for public-sector worker retirement plans.

This system is generally successful for its recipients, and for the first time in human history a large portion of the population can expect a retirement that is actually enjoyable and doesn't involve starvation and being placed on ice floes.


Problem: Shareholders decide they want annual gains in share value of at least 10% a year every year.  Also, they don't want to pay any taxes on those gains.

Solution:Stagnate wages to all worker levels below upper management,

www.artonissues.com

and elect politicians who steadily reduce tax rates on upper income levels, and declare capital gains to be excluded from ordinary income.

Problem: This works for a while, but 10%/yr adds up so we need to squeeze more.

Solution: Eliminate defined benefit (pension) plans for all worker levels below upper management, and replace with defined contribution plans (401k, IRA). Sell defined contribution plans as being better for the worker ("They're portable!") and use unrealistic growth assumptions ("12% a year, and with never a market correction!"). This produces a feeding frenzy for the finance industry, in large part because average workers don't know that 2-5% fees are looneytunes and have no realistic way to know that they could have used no-loads with maybe .2% fees for the same indexes, assuming their employer lets them have any access to something like that.

Problem: Of course, the market doesn't really work as predictably or as lucratively for its end users to give 12% net returns every year, and workers are beginning to realize they won't have anywhere near enough money for retirement.

Solution: Blame the workers. They didn't put enough into their 401k (never mind the declining wages for 30+ years) because they're irresponsible spendthrifts (wanting to have children! buy shoes, healthcare and education for those children!). It's their fault, because all workers should have the same professional level of understanding and education in financial management as a licensed financial planner. So it's their fault you see.
 
2013-09-06 04:12:45 PM
ITT: Farkers think that 20 year olds are putting money into accounts. Every calculation I've seen in this thread accounts for people to start saving for retirement when they hit 20...when most people who are 20 are still in college, then off to grad school to be able to compete in this economy...and then searching for a job for 6 months - 3 years...so realistically my generation is only going to be saving (IF they are saving at all) from the ages of 25, 26, 27....so 30 years TOPS.

My company does a 5% match, but very few of the 30 and under (and a surprising number of over 40s) dont take advantage of the 401(k) plan, such as it is.

Someone said above there seems to be no pressure for financial planning...and I'd agree. Most of the younger people I work with go out often...are not very responsible with their money.
 
2013-09-06 04:13:51 PM

error 303: the whole 401k model seems like such a crapshoot.


Really? You doubt that rank and file americans have the savvy to succeed at something that accredited professional money managers with huge buying advantages utterly failed at? You don't say...

Me, I'm doing ok and I think my lucky stars that I somehow learned about index funds and the effect of fund expenses at an early age and took it to heart. I still doubt I'll have enough but I do think I'm doing better than most - I'm not making a ton of money, just that I started saving in my early 30's and have put substantial amounts of money into low cost index funds for more than a decade so I have something of a balance.
 
2013-09-06 04:19:12 PM

The_EliteOne: realistically my generation is only going to be saving (IF they are saving at all) from the ages of 25, 26, 27....so 30 years TOPS.


You think this generation is going to retire at 55?
 
2013-09-06 04:20:41 PM
Dave Ramsey admits that his plan isn't mathematically perfect.  But it is based more on psychology and getting you to think about what you are doing with money and communicate it with your spouse.

But then we have a net worth well into 6 figures including a paid off house and 3 paid off cars so who knows...
 
2013-09-06 04:22:52 PM

HeadLever: While he has a degree in Finance from UTenn


No he doesn't. He has a BA in Business Administration from UTenn. That's the male equivalent of a sorority girl with a Communications degree. He's on par with Robert Kiyosaki, Suze Orman or Motley Fool. Good luck with that, and keep blaming average Americans for getting shut out of our nation's continual growth and prosperity - it's their fault for not getting an MBA.
 
2013-09-06 04:23:52 PM

The_EliteOne: from the ages of 25, 26, 27....so 30 years TOPS.


From 25 to 65 is 40 years.  Say I save a modest $300/month and my employer matches 50%.  Say I average 8%.  When I retire at age 65, I'll have $1.57Million.

It just takes a bit of discipline.
 
2013-09-06 04:27:48 PM
 
2013-09-06 04:28:08 PM

HeadLever: Say I average 8%.


That's not realistic
 
2013-09-06 04:29:41 PM

thurstonxhowell: You think this generation is going to retire at 55?


When they're living to 90+?  Perhaps they ought not retire that early?
 
2013-09-06 04:29:58 PM

thurstonxhowell: The_EliteOne: realistically my generation is only going to be saving (IF they are saving at all) from the ages of 25, 26, 27....so 30 years TOPS.

You think this generation is going to retire at 55?


No, I think they'll retire in the early/mid 60s, but only start saving at the earliest at 30.
 
2013-09-06 04:30:03 PM

TheGreatGazoo: Dave Ramsey admits that his plan isn't mathematically perfect.


Yep.  He advocates that you attack your debts smallest to largest in order to keep momentum going on paying your debts off.  Mathmatically, it would make sense to pay them off highest interest rate to lowest.
 
2013-09-06 04:31:24 PM

rnld: HeadLever: Say I average 8%.

That's not realistic


That's conservative.  It doesn't even account for company match (free money).
 
2013-09-06 04:32:16 PM

rnld: That's not realistic


As stated by someone upthread, the S&P average is about 10% over the long term.  8% is perfectly realistic.

/S&P is up 16.6% YTD.
 
2013-09-06 04:37:11 PM

Tyrone Slothrop: mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...

And when the hell did becoming an expert money manager become a requirement for having a decent old age? Why shouldn't being good at what you are good at be enough?


Because most people aren't good at anything. They're just average blobs of mediocrity. It's impossible to even tell them apart. So we can't restrict a decent old age to people who are actually good at something.
It would be unfair.
 
2013-09-06 04:39:05 PM

HeadLever: The_EliteOne: from the ages of 25, 26, 27....so 30 years TOPS.

From 25 to 65 is 40 years.  Say I save a modest $300/month and my employer matches 50%.  Say I average 8%.  When I retire at age 65, I'll have $1.57Million.

It just takes a bit of discipline.


Now that's not bad, but in my work experience many younger people are not putting anything away...and starting with an entry level salary, realistically, they will put away $100 or $150, if at all. That's provided they get a job with a 401(k) plan. You're also assuming an annual 8% return on every year of those 40...not going to happen. The good news is we can assume people will make more as they age, and probably make up that 150 difference and even surpass the $300/month mark...(Although, can we really say that with confidence when you look at how median wages have been over the past decades?)

I'd also say it's more than just discipline, it's also about getting raises, bonuses, making more money & advancing in your career, balanced against quality of life, home ownership, kids, unexpected life catastrophes...and the uncontrollable factors of your returns.

Tell all of that to some twenty-five year old, and they will look at you like "You're nuts, like I even know where/who/what I'm going to be in five years!"
 
2013-09-06 04:41:35 PM
January 20 2001 the S&P was at 1341

Jan 20 2009 The S&P was at 805
 
2013-09-06 04:42:46 PM

HeadLever: El Pachuco: No he doesn't

Ramsey earned his B.S. degree in Finance and Real Estate from the University of Tennessee.

Are you lying again?


You're projecting again.  So you take financial advice from someone with a BA in Business and a record of failure?  Good luck.
 
2013-09-06 04:46:00 PM

El Pachuco: You're projecting again.


I am projecting that he has a BS in Finance?  Really?  Dude, that is weaksauce, even for you.

Can you even come up with a source that shows him to have a BA in Buisness?  I have already provided my sources that show that you are talking out your ass.
 
2013-09-06 04:47:31 PM

rnld: Jan 20 2009 The S&P was at 805


And today it is at 1655.
 
2013-09-06 04:48:40 PM

KierzanDax: "...and invest too conservatively to sustain themselves through old age."

Except that those of us who did take on higher risk "because you're young and you can weather any market fluctuations!" got f*cked in the ass by Wall Street selling shiat sandwiches as "moderate risk".


Only if you cashed out. If you opted to cash out during the crash, you ignored wall street. If you had to, you ignored wall street when you put short-term money in a long term investment.

You made that sandwich.
 
2013-09-06 04:49:36 PM

HeadLever: rnld: Jan 20 2009 The S&P was at 805

And today it is at 1655.


Yeah, but isnt this because the fed has been pumping 85 BILLION into the market every month?

Every time Bernanke or his minions give a press release about easing QE everyone becomes chicken little.
 
2013-09-06 04:50:11 PM
HeadLever: From 25 to 65 is 40 years.  Say I save a modest $300/month and my employer matches 50%.  Say I average 8%.  When I retire at age 65, I'll have $1.57Million.

It just takes a bit of discipline.


You sound young. It also takes a lot of luck.

From 25 - 65, you're apt to marry and/or spawn an off-spring or two. Also likely to be: divorced, fired, laid-off, sick, or disabled in that same 40 year period. Once one bad thing happens, things tend to go downhill very quickly. After which, you'll have to raid your retirement account just to eat.

/ middle aged
// survived my 2009 personal & financial disaster pretty well
/// not bitter
//// love slashies
 
2013-09-06 04:51:57 PM

HeadLever: TheGreatGazoo: Dave Ramsey admits that his plan isn't mathematically perfect.

Yep.  He advocates that you attack your debts smallest to largest in order to keep momentum going on paying your debts off.  Mathmatically, it would make sense to pay them off highest interest rate to lowest.


If I recall correctly, Ramsey acknowledges that his approach isn't strictly the mathematically best way to do things. His approach is psychological, designed for people who are discouraged and need to see progress.

It's not for everyone, but I know some people who have been really helped by his advice.
 
2013-09-06 04:52:45 PM

mcreadyblue: HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

Frontline had a great show that talked about retirement/401K.

They pointed out 2/3 of gains are typically swallowed up in fees by the Wall Street companies that run the 401ks.


Absolute bullshiat. Why do you guys believe this propaganda? You are being lied to.

That quote comes from someone hypothetically getting 7% returns while paying a 2% fee over many years. 2% fee is extraordinarily high. I can't find a fund allowed by my companies 401k that charges over 1%, and those near 1% are international funds where investing is more expensive. And index funds charge a small fraction of that.

Don't be fooled. Save as much as you can in your 401k. It's a good deal for you.
 
2013-09-06 04:52:47 PM

The_EliteOne: but in my work experience many younger people are not putting anything away...and starting with an entry level salary, realistically, they will put away $100 or $150, if at all.


And that is part of the underlying problem.  The younger generation does not realize how important it is to get an early start.  They don't understand compoud interest at all.  That is where having a Dave Ramsey or simliar program taught in HS would help them understand.

I started my retirement when I was 25, just because one of my co-workers slapped me upside the head with a few facts when I started.  Boy, am I ever grateful for that.
 
2013-09-06 04:54:15 PM

HeadLever: From 25 to 65 is 40 years. Say I save a modest $300/month and my employer matches 50%. Say I average 8%. When I retire at age 65, I'll have $1.57Million.

It just takes a bit of discipline.


That's an unattainable dream for recent grads, not something that a little discipline will get you.
The pay isn't there, nor are the benefits. The job I did have with great pay and benefits was outsourced before I could ever contribute. When outsourcing didn't work out, what I used to get $21/hr with full bennies and a defined career path is now performed by interns who get <$10/hr and the knowledge they're gone if the wind changes.
My current job has neither the wages to support decent savings nor does it do 401K matching. And this is what the majority of jobs are looking like these days. All this talk of discipline and 8% returns for 40 years sounds like so much "I've got mine, fark you." It's the same kind of ignorance that still thinks hitting the bricks will land you a great job.
 
2013-09-06 04:54:30 PM

GoldSpider: meat0918: That's a huge chunk of cash taken out of circulation, sitting earning interest in some account, 401K, IRA, or whatever you choose.

Also, why would you imagine money put away in an INVESTMENT ACCOUNT be sitting stagnant and not circulating in the economy?

It should be evident to you by now you haven't a single gotdamned clue what you're talking about.


Good god people.

Banks STILL aren't lending.  Wages are stagnant.  Money has accumulated in too few hands.  This is bad.

And yes, I save 10% a month, even though I want to go to go on a long vacation, buy a second car, get a new computer, a new bike, and god knows how many other things I don't buy or spend my money on because I'm trying to be responsible with my money so I don't end up like my mother who blew through her retirement account in 2 years because of medical expenses for her husband, or my mother in law that flat out doesn't have any retirement to speak, or my dad that will be relying on a measly pension after 30 years of automotive parts work, farming, and leasing out the family farm land he doesn't use to others when he retires.
 
2013-09-06 04:56:26 PM

HeadLever: rnld: Jan 20 2009 The S&P was at 805

And today it is at 1655.


Correct - But it was at 1527 in 2000.
 
2013-09-06 04:56:57 PM

The_EliteOne: Yeah, but isnt this because the fed has been pumping 85 BILLION into the market every month?


Partially true and there is genuine concern about the economy moving forward.  However, that could have been said during every generation.  I am not close to retirement, so these short(er) term problems are not a reason for me to change course at this time.  What concerns me more is the rapid and coninued explosion in the National Debt.
 
2013-09-06 04:58:33 PM

El Pachuco: Problem: 100% of Americans need a source of funds for retirement after working and contributing to the economy for 40-50 years.
Solution: 1935 Social Security is created, but is never intended to be the sole source of retirement funds.  Between 1945 and 1980 or so, public- and private-sector unions are notably successful in negotiating defined-benefit retirement plans (pensions) for average US workers at nearly all levels of income.  Businesses experience steadily rising production efficiencies, with rising profits, and can afford to pay for pension plans. Progressive taxes pay for public-sector worker retirement plans.
This system is generally successful for its recipients, and for the first time in human history a large portion of the population can expect a retirement that is actually enjoyable and doesn't involve starvation and being placed on ice floes.
Problem: Shareholders decide they want annual gains in share value of at least 10% a year every year.  Also, they don't want to pay any taxes on those gains.

Solution:Stagnate wages to all worker levels below upper management,



and elect politicians who steadily reduce tax rates on upper income levels, and declare capital gains to be excluded from ordinary income.

Problem: This works for a while, but 10%/yr adds up so we need to squeeze more.

Solution: Eliminate defined benefit (pension) plans for all worker levels below upper management, and replace with defined contribution plans (401k, IRA). Sell defined contribution plans as being better for the worker ("They're portable!") and use unrealistic growth assumptions ("12% a year, and with never a market correction!"). This produces a feeding frenzy for the finance industry, in large part because average workers don't know that 2-5% fees are looneytunes and have no realistic way to know that they could have used no-loads with maybe .2% fees for the same indexes, assuming their employer lets them have any access to something like that.

Problem: Of course, the market doesn't really work as predictably or as lucratively for its end users to give 12% net returns every year, and workers are beginning to realize they won't have anywhere near enough money for retirement.

Solution: Blame the workers. They didn't put enough into their 401k (never mind the declining wages for 30+ years) because they're irresponsible spendthrifts (wanting to have children! buy shoes, healthcare and education for those children!). It's their fault, because all workers should have the same professional level of understanding and education in financial management as a licensed financial planner. So it's their fault you see.


Your conclusion is pretty close to accurate. If you haven't saved enough for retirement, you are stupid and irresponsible. Is it their fault that they were born with those negative traits? I suppose not, but it doesn't change the fact that they are, in fact, stupid and irresponsible.

The liberal position regarding pensions and retirement is essentially :"we need employers to take over retirement planning because our constituents are too farking stupid to do it for themselves!!"
 
2013-09-06 04:59:03 PM
The main problem I have with these articles is that they discourage folks from even trying.

No one knows the future. Salary, savings, career length, etc. are not guaranteed.

But that does not mean you can't give it a try. Not to guarantee, but to improve the odds.

Almost 20 years ago there were a lot of naysayers who said either "why invest in a 401K? my pension is my retirement", or "why invest if I can't touch the money for 30-40 years? By that time it won't be worth anything!"

And then, Black Monday in 1987, when I saw my 401K lose 22% of its value in ONE DAY. When statements came out, you should have seen folks rushing to get out of their 401K ("I'll lose everything if I stay in!").

My 401K has done well over the past 29 years... but I did not know that at the time. And every crisis that came along I saw folks panic and take money out. I had no more insight than them. I just thought "what are the long term odds?" And kept plugging away.

Oh, and also - I kept my 401K simple. All index funds - large cap, small cap, international, bond fund. Part of the problem is that 401K plans offer so many options that folks think they need to take advantage of those options. 90% of folks should just stick to broad index funds and probably no more than 5 (full disclouse: I am a Boglehead).
 
2013-09-06 04:59:42 PM

meat0918: Banks STILL aren't lending. Wages are stagnant. Money has accumulated in too few hands. This is bad.


All true, but do nothing to support your assertion that more people saving more money for retirement would be a bad thing because it takes money out of the economy.  Because that's simply not true.
 
2013-09-06 05:00:42 PM

robbrie: You sound young. It also takes a lot of luck.


Mid 30s.  I have 12 years of investing and doing OK.  You are correct that Murphey can strike at any time and that is just part of life.  Just need to be smart and careful.  Find good job, good spouse, work hard, play harder.  Work hardest at being thankful for what you do have.
 
2013-09-06 05:01:11 PM

Debeo Summa Credo: The liberal position regarding pensions and retirement is essentially :"we need employers to take over retirement planning because our constituents are too farking stupid to do it for themselves!!"


Really?
 
2013-09-06 05:02:06 PM

El Pachuco: HeadLever: El Pachuco: No he doesn't

Ramsey earned his B.S. degree in Finance and Real Estate from the University of Tennessee.

Are you lying again?

You're projecting again.  So you take financial advice from someone with a BA in Business and a record of failure?  Good luck.


No, you're projecting that I'm "lying again."

You clearly have no idea what a B.S. degree in Finance and Real Estate actually encompasses.  Granted, I'm simplifying by calling it a BA in Business, but that's what it is, effectively.
 
2013-09-06 05:02:57 PM

wombatsrus: The main problem I have with these articles is that they discourage folks from even trying.

No one knows the future. Salary, savings, career length, etc. are not guaranteed.

But that does not mean you can't give it a try. Not to guarantee, but to improve the odds.

Almost 20 years ago there were a lot of naysayers who said either "why invest in a 401K? my pension is my retirement", or "why invest if I can't touch the money for 30-40 years? By that time it won't be worth anything!"

And then, Black Monday in 1987, when I saw my 401K lose 22% of its value in ONE DAY. When statements came out, you should have seen folks rushing to get out of their 401K ("I'll lose everything if I stay in!").

My 401K has done well over the past 29 years... but I did not know that at the time. And every crisis that came along I saw folks panic and take money out. I had no more insight than them. I just thought "what are the long term odds?" And kept plugging away.

Oh, and also - I kept my 401K simple. All index funds - large cap, small cap, international, bond fund. Part of the problem is that 401K plans offer so many options that folks think they need to take advantage of those options. 90% of folks should just stick to broad index funds and probably no more than 5 (full disclouse: I am a Boglehead).


Agreed completely. Automatic investing via 401k payroll deduction also results in automatic dollar cost averaging. If you are under 45 or 50 and the market tanks, look at it as an opportunity to buy cheaply.
 
2013-09-06 05:03:29 PM

GoldSpider: meat0918: Banks STILL aren't lending. Wages are stagnant. Money has accumulated in too few hands. This is bad.

All true, but do nothing to support your assertion that more people saving more money for retirement would be a bad thing because it takes money out of the economy.  Because that's simply not true.


I'll acknowledge that the money will be spent eventually as well.  Also, I said investment accounts, but my brain was thinking "under the mattress or in a jar buried in the backyard."
 
2013-09-06 05:03:31 PM

nosferatublue: His approach is psychological, designed for people who are discouraged and need to see progress.


Yeah, his response that personal finance is 20% actual finance and 80% personal behavior.
 
2013-09-06 05:06:18 PM
Step 1: know exactly what you spend your money on.
 
2013-09-06 05:06:39 PM

Debeo Summa Credo: Your conclusion is pretty close to accurate. If you haven't saved enough for retirement, you are stupid and irresponsible. Is it their fault that they were born with those negative traits? I suppose not, but it doesn't change the fact that they are, in fact, stupid and irresponsible.

The liberal position regarding pensions and retirement is essentially :"we need employers to take over retirement planning because our constituents are too farking stupid to do it for themselves!!"


For a guy who lies about having MBA, CPA and CFA designations, you really don't seem to understand economics, money management or the finance industry.  That could explain why you've never been able to afford to buy a new car, though.
 
2013-09-06 05:10:39 PM

El Pachuco: You clearly have no idea what a B.S. degree in Finance and Real Estate actually encompasses. Granted, I'm simplifying by calling it a BA in Business, but that's what it is, effectively.


You apparently have no idea what the difference between a BS and BA degree encompasses.  But that is not suprising.  Here let me provide you with a link that goes over the distinction

We are making progress though.  You have moved from 'self-taught' to now acknowledging that he has a BA degree.  Before you know it, you might even move your goalpost up the the BS in Finance.
 
2013-09-06 05:21:53 PM

El Pachuco: For a guy who lies about having MBA, CPA and CFA designations,


As opposed to a guy that lies about other folks degrees?  lol,  Pot, meet Kettle.
 
2013-09-06 05:23:32 PM

rnld: Debeo Summa Credo: The liberal position regarding pensions and retirement is essentially :"we need employers to take over retirement planning because our constituents are too farking stupid to do it for themselves!!"

Really?


I don't know about the liberals; I'm a socialist. But yeah, you farking tards need some help, and it's not just because the man is beating down on you.
 
2013-09-06 05:24:07 PM

rumpelstiltskin: Yeah, it's The System's fault you can't save any money.


Um...the entire point of the article is that even people who can (and do) save money (ie, people who do exactly what they're "supposed" to do) still end up getting the short end of the stick. So yeah, it really is the system's fault. And the assholes who are responsible for the system being what it is.
 
2013-09-06 05:27:17 PM

HeadLever: The_EliteOne: from the ages of 25, 26, 27....so 30 years TOPS.

From 25 to 65 is 40 years.  Say I save a modest $300/month and my employer matches 50%.  Say I average 8%.  When I retire at age 65, I'll have $1.57Million.

It just takes a bit of discipline.


When I started at my current job, we had some training and one of them was about the 401(k).  They showed us the nice little chart that showed if put in 5% or whatever and it was matched and it averaged 8% (or whatever), you would be a mutli-millionaire when you retired.  The guy next to me apparently never had a real job and got a little excited.

I turned the page of the handout and showed him that only once in the past 10 years had the 401(k) hit the presumed average return for a year.  But still, matching is 100% return, so I will take that return all day.
 
2013-09-06 05:33:12 PM

The Dog Ate My Homework: rumpelstiltskin: Yeah, it's The System's fault you can't save any money.

Um...the entire point of the article is that even people who can (and do) save money (ie, people who do exactly what they're "supposed" to do) still end up getting the short end of the stick. So yeah, it really is the system's fault. And the assholes who are responsible for the system being what it is.


I have no idea what article you read. The point of the article in the link is that middle income people don't, in general, save.
 
2013-09-06 05:37:11 PM

wombatsrus: (full disclouse: I am a Boglehead).


You sir, are winning.

Isn't it funny that an s&p 500 index fund was viewed as a 'conservative' investment in the late 90's? We have since all come to our senses and learned that stock funds in general can drop 40% in a year and have done so a couple times since the tech bubble and are not at all 'conservative'.
 
2013-09-06 05:41:46 PM

rumpelstiltskin: The Dog Ate My Homework: rumpelstiltskin: Yeah, it's The System's fault you can't save any money.

Um...the entire point of the article is that even people who can (and do) save money (ie, people who do exactly what they're "supposed" to do) still end up getting the short end of the stick. So yeah, it really is the system's fault. And the assholes who are responsible for the system being what it is.

I have no idea what article you read. The point of the article in the link is that middle income people don't, in general, save.


Yeah, and if they are saving, it is not enough.  If I put in a penny a day into my retirement I am saving like I am supposed to.  It is not the systems fault that what I am saving is completely inadequate for my retirement needs.
 
2013-09-06 05:49:53 PM

rnld: January 20 2001 the S&P was at 1341

Jan 20 2009 The S&P was at 805


How do I know you have no idea how long term investing works?

That was a buying opportunity for anyone with more than a 5 year horizon to go.  Today the S&P ended at 1655.  That's a 25% return year over year for everything invested in 2009.  >120% in total.  PLUS, anything you already had invested gained 19% from 2008, almost 5% year over year.

Time is the important factor.  Over a long enough horizon (>10-20 years) the market is always a winner.
 
2013-09-06 05:53:19 PM
There are funds to buy that are no load and small fee funds.  It's just tricky when the employer picks the funds.

Most folks in the investment business are sales people and make a lot of money when they land an employer.

My neighbor, 2 houses down, is a Sr VP at Morgan Stanley.  I totally understand how/why he makes money.  My ex assistant is now in finance and he explained exactly his cut selling investments.

You can set up your own broker account at Fidelity for instance, do research and make the bulk of the returns without a cut to a salesman.
 
2013-09-06 05:59:04 PM

AngryDragon: rnld: January 20 2001 the S&P was at 1341

Jan 20 2009 The S&P was at 805

How do I know you have no idea how long term investing works?

That was a buying opportunity for anyone with more than a 5 year horizon to go.  Today the S&P ended at 1655.  That's a 25% return year over year for everything invested in 2009.  >120% in total.  PLUS, anything you already had invested gained 19% from 2008, almost 5% year over year.

Time is the important factor.  Over a long enough horizon (>10-20 years) the market is always a winner.

You are picking a timeframe that is not long term.  No question after the meltdown the S&P has done amazing, but not everyone started investing in 2008.

5% is not 8%.

The huge run up of the S&P was in the '90's.

 
2013-09-06 06:15:50 PM

HeadLever: Ah, so you are a anti-religious bigot. I see now. Sorry, I mistook you for someone that was honestly discussing the topic.


pfft... honesty is for pussies brah!
 
2013-09-06 06:23:02 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

[www.creditwritedowns.com image 570x371]


The graph starts in 1982 when interest rates were like 15%.

But artificially low interest rates punish savers and reward debtors.
 
2013-09-06 06:26:53 PM

jigger: The graph starts in 1982 when interest rates were like 15%.


The days of 10% tax free bonds.
 
2013-09-06 06:27:35 PM

HeadLever: AngryDragon: Is there a reason why they don't teach a semester of personal finance in high school?

Make it manditory to listen to the Dave Ramsey radio show for a week.


He's got a lot of good advice on how to get out of debt but his investment advice is total shiat.
 
2013-09-06 06:28:30 PM

jigger: But artificially low interest rates punish savers and reward debtors.


That is a good point. Another reason that I belive that we need to start scaling back QE and letting interest rates normalize.
 
2013-09-06 06:30:52 PM

The_EliteOne: thurstonxhowell: The_EliteOne: realistically my generation is only going to be saving (IF they are saving at all) from the ages of 25, 26, 27....so 30 years TOPS.

You think this generation is going to retire at 55?

No, I think they'll retire in the early/mid 60s, but only start saving at the earliest at 30.


See, I was confused, because what you said was that they'd start saving "from the ages of 25, 25, 27". Which are different ages than 30, which is still more than 30 years from retirement for most people. Also, I've been saving since I was 24. Longer if you count the IRA my parents encouraged me to put birthday money in when I was younger.
 
2013-09-06 06:32:20 PM

jigger: He's got a lot of good advice on how to get out of debt but his investment advice is total shiat.


I would not say total shiat.   I will agree that it will not work for everyone, thought.  His basic investment advice is sound (take advantange of Roths, employer matches, etc), though his anticipated returns is pretty optimistic and is not realistic.
 
2013-09-06 06:32:52 PM
I only have a small mortgage on my house, 1/3 of local rent costs, no other debt and a healthy nest egg for retirement.  I still sock away as much as possible but worry about the money lasting 30 years.
 
2013-09-06 06:45:09 PM

HeadLever: El Pachuco: You clearly have no idea what a B.S. degree in Finance and Real Estate actually encompasses. Granted, I'm simplifying by calling it a BA in Business, but that's what it is, effectively.

You apparently have no idea what the difference between a BS and BA degree encompasses.  But that is not suprising.  Here let me provide you with a link that goes over the distinction

We are making progress though.  You have moved from 'self-taught' to now acknowledging that he has a BA degree.  Before you know it, you might even move your goalpost up the the BS in Finance.


Dude, give it up - a BA or BS in any kind of business-y field does not qualify anyone to be a financial advisor.  It gets you an entry-level job somewhere, if you're lucky.  And after he graduated, at the age of 22, with his "business" degree, he created and then blew up a business using other peoples' money.  That's the definition of self-taught, at other peoples' expense.

HeadLever: El Pachuco: For a guy who lies about having MBA, CPA and CFA designations,

As opposed to a guy that lies about other folks degrees?  lol,  Pot, meet Kettle.


Here in this thread you are lying about the MBA, CPA and CFA things.  Given all the errors you make in describing finance and econ, you clearly don't have all those designations, and probably don't have any one of them.  Which makes sense, because you spend waaay too much time on Fark for a guy who claims to have qualifications that would get him a CFO position in a Fortune 500 corp, or management at a hedge fund or similar.

And yet in this thread you say  Debeo Summa Credo 21 Aug 2013 11:22 AM    I've never had a new car and don't think i ever would want to, unless I make enough money at some point that I wouldn't care about wasting a good chunk. So, despite the fact that any one of those designations (if you actually had them) would get you a six-figure position, you sound broke.

And you're a right-winger, all of which explains why

Debeo Summa Credo: If you haven't saved enough for retirement, you are stupid and irresponsible. Is it their fault that they were born with those negative traits? I suppose not, but it doesn't change the fact that they are, in fact, stupid and irresponsible.


can be paraphrased as, "fark you, Grandma, better luck next life, no retirement for you." You, sir, are a scholar and a gentleman.
 
jgi
2013-09-06 06:56:40 PM
El Pachuco: ...And you're a right-winger, all of which explains why...

That guy Debeo is some sort of shill, definitely. Upthread he said "Don't be fooled. Save as much as you can in your 401k. It's a good deal for you." -- this is demonstrably false for many people. Expense ratios in many peoples' 401Ks dig hard into any gains you might receive and 401Ks are really only worth it if your employer gives you a generous match. Every thing he ever types into this Fark machine thing strikes me as wrong. He's paid minimum wage to say stupid things on the internet.
 
2013-09-06 07:10:04 PM
I'm simply amazed at how many of my friends in my age group (early 30's) are white collar workers and yet they don't contribute to any form of 401k/retirement, or if they do, it's a minescue amount, like 2%.

I'm 31 now and closing in on 6-figures combined between my 401k and Roth 401k. I've been putting in 8% into one and 4% of my gross income into the other. On top of that, my company matches an additional 4%. Even with putting in 16% towards retirement, I feel like I should be putting in more, but for now I'm focusing discretionary monies on real estate and travel, before I settle down and have a family.

Like most people my age, had they started investing when they entered the job market, they could have ridden the massive ramp-up the stock market has seen over the past 5 years. Getting 20% - 25% annual returns has done wonders for building wealth. So has buying a bunch of TSLA on IPO day.
 
2013-09-06 08:15:46 PM

mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...


The answer from the left would be - you have too much share with the hobo and that college kid over there -
 
2013-09-06 08:24:04 PM

El Pachuco: a BA or BS in any kind of business-y field does not qualify anyone to be a financial advisor.


It does not disqualify you either.  Again, you butt is talking.  You may want to tell it to quit typing.

 It gets you an entry-level job somewhere,

When you get out of college, you get an entry-level job.   themoreyouknow.jpg

Here in you are lying about the MBA, CPA and CFA things.

Control+F HeadLever = 0 Results.  Lol, You are lying about me even being in that thread.  Shocking that you lie about me lying.  Are you even trying?

Looks like it is time to post your Monty Python pic and declare victory.

/lol
 
2013-09-06 08:25:04 PM

youmightberight: mediablitz: I have SS, 401k, a retirement fund, two houses paid for and I still doubt I'm set up for retirement.

But that (of course) is because I'm lazy and don't know how to handle money. That's ALWAYS the right wing answer...

The answer from the left would be - you have too much share with the hobo and that college kid over there -


The right wing version of - I know you are but what am I?
 
2013-09-06 08:37:11 PM

MrSteve007: I'm 31 now and closing in on 6-figures combined between my 401k and Roth 401k. I've been putting in 8% into one and 4% of my gross income into the other. On top of that, my company matches an additional 4%. Even with putting in 16% towards retirement, I feel like I should be putting in more, but for now I'm focusing discretionary monies on real estate and travel, before I settle down and have a family.


Good for you.  pretty much in the same boat.  I put in 10% and company matches 3%.  Bought some additional company stock, bought a chunk of bare land in BFE that we want to put a cabin on one day, and pretty much minimal debt besides the mortgage.
 
2013-09-06 08:40:00 PM
Baby boomers, as a group, have inadequate savings to fund their retirement. Gen X and the Millennials, OTOH, have no savings and the most massive debt load in the history of the human race. Three generations screwed by the FED in their efforts to "stimulate" the economy over the last 40 years.
 
2013-09-06 08:43:21 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

[www.creditwritedowns.com image 570x371]


Personal responsibility will always take a back seat to human nature. The FED has gamed the system to punish savers and reward spenders (especially if they go into debt to spend), and people have responded.
 
2013-09-06 08:46:03 PM

El Pachuco: And yet in this thread you say  Debeo Summa Credo 21 Aug 2013 11:22 AM    I've never had a new car and don't think i ever would want to, unless I make enough money at some point that I wouldn't care about wasting a good chunk. So, despite the fact that any one of those designations (if you actually had them) would get you a six-figure position, you sound broke.


What did I say?  I don't see anything in there that I said that you say.

I don't know if I have ever seen someone try as hard as you to be a complete contrarian to common sense.  I am still not sure what you find objectionable on Dave Ramsay's advice.  Bringing up his earlier failures in this discussion just makes you look petty and a partisan hack. I think it is time for me to label you as a simple troll and partisan hack and treat you as such.
 
2013-09-06 09:19:51 PM

skozlaw: If a self-managed retirement account were a sensible way of planning for retirement everybody would just be a stock broker from day one.

I have an IRA and a 401k because I have no reasonable retirement-planning options (and I'm not leaving the paltry company match on the table), but even though I'm doing fine with both I think the whole idea is still farking retarded. If everybody were able to make money in the stock market everybody would be a goddamn fund manager. You shouldn't have to have two careers your entire life just so you can eat past 65.

401ks are particularly insidious since the only thing they actually accomplish is a better bottom line for the companies that get to cut their staffing costs.

On the flip side, it's workers' faults they let companies steal their pensions away in the first place so I'm a bit torn on who gets more ire, companies or their employees.


This this SO much this.  I was fortunate to work for many years for a company WITH a decent pension AND a nice 401k match.  When they eventually did away with the pension and replaced it with an "enhanced" 401k and tried to rah rah rah everyone into believing they would be so much better off in the long run, I pointed out that they were basically admitting that trained and educated professionals who invest pension funds for a living could no longer make it work, but "hey!  you joe shmoe everyday guys should be able to make it work great!"

SO you're gonna screw me.  Then just say so, and do it- don't insult me by telling me you love me.
 
2013-09-06 09:23:08 PM

HeadLever: Control+F HeadLever = 0 Results


Hey, Prof. Hawking, go back and press my link again and maybe this time you'll notice it goes straight to a quote by DSC, right to his name, where he says all that stuff.  I didn't see it was you butting in on a comment not directed at you, so that's two dumbass errors you made in a row.  I know you're uneducated - you've never claimed otherwise - but at least you don't say you have graduate degrees you haven't earned, so you can at least take comfort in the fact that you're better than DSC.

/pythonblackknight.jpg
 
2013-09-06 09:25:27 PM

DrPainMD: Personal responsibility will always take a back seat to human nature.


that is also a good point.  Human nature, however, does not excuse bad decisions and the obligation of personal responsibility.
 
2013-09-06 09:26:14 PM

DrPainMD: Baby boomers, as a group, have inadequate savings to fund their retirement.


Boomers had an unprecedented opportunity to get into the stock market and buy real estate. If they can't afford retirement don't blame the fed.
 
2013-09-06 09:33:51 PM

El Pachuco: Hey, Prof. Hawking, go back and press my link again and maybe this time you'll notice it goes straight to a quote by DSC


in other words you can't even keep it straight who you arguing against. You make a statement against my argument, but post a link from someone else.  Nice.  Trolls don't have a very good memory, I am told.  Happy to have you confirm this.
 
2013-09-06 09:38:19 PM
And my income would be better if I was taxed left. Lol
 
2013-09-06 09:41:26 PM

El Pachuco: I didn't see it was you butting in on a comment not directed at you


Your post: in brackets

[HeadLever: El Pachuco: For a guy who lies about having MBA, CPA and CFA designations,

As opposed to a guy that lies about other folks degrees?  lol,  Pot, meet Kettle.


Here in this threadyou are lying about the MBA, CPA and CFA things.  Given all the errors you make in describing finance and econ, you clearly don't have all those designations, and probably don't have any one of them.  Which makes sense, because you spend waaay too much time on Fark for a guy who claims to have qualifications that would get him a CFO position in a Fortune 500 corp, or management at a hedge fund or similar.]

Troll = no memory.  Check again.
 
2013-09-06 09:47:25 PM

AngryDragon: They are also missing a magic way to get a guaranteed 8%.  Safe investments are making less than 2%.  Younger folks can roll the dice, but people already in their 50s and 60s are playing it safe.

Returns are usually calculated by historical averages.  Example:


I'm familiar with the historical average/CAGR.  There also used to be passenger pigeons.  8% annual growth in a world where the world population doubled every 30 years is a little different than predicting 8% annual growth in a world with a steady-to-declining population (as will happen within the lifetime of many people reading this). Ask Japan about that.

Even people like Warren Buffett and Jack Bogle, guys big on 'buy and hold indexing' (as am I), will tell you that 8% annualized over the next 50 years is beyond optimism.
 
2013-09-06 11:08:03 PM

HeadLever: rnld: That's not realistic

As stated by someone upthread, the S&P average is about 10% over the long term.  8% is perfectly realistic.

/S&P is up 16.6% YTD.




Year is not over yet.
 
2013-09-06 11:11:10 PM

rnld: HeadLever: rnld: Jan 20 2009 The S&P was at 805

And today it is at 1655.

Correct - But it was at 1527 in 2000.




NASDAQ was 5,000 back in 2001, today it's 3,600.

Don't forget to include inflation.
 
2013-09-06 11:31:08 PM

HempHead: NASDAQ was 5,000 back in 2001, today it's 3,600.


You cherry picking the dot com bubble high point perhaps?

S&P returns here

Nasdaq100 returns here

If you want to base your investments off of historical highs and lows, that is your prerogative.  However, don't call it the 'system's' fault for you loosing your arse.
 
2013-09-06 11:32:05 PM

HempHead: Year is not over yet.


nope, it might even be higher by year's end.  or not....
 
2013-09-07 12:02:41 AM

HeadLever: HempHead: Year is not over yet.

nope, it might even be higher by year's end.  or not....




October is going to be a cruel cruel month as the the QE "taper" happens.
 
2013-09-07 12:12:20 AM

HempHead: October is going to be a cruel cruel month as the the QE "taper" happens.


We will see.  Sequester was really going to hit the market as well and that ended up being a dud.  The shock of QE tapering is not going to surprise anyone.  If we can continue to grow at a moderate or slow pace and unemployment continues its molasses creep toward 6%, you won't probably see much movement.
 
2013-09-07 01:36:30 AM

HeadLever: MrSteve007: I'm 31 now and closing in on 6-figures combined between my 401k and Roth 401k. I've been putting in 8% into one and 4% of my gross income into the other. On top of that, my company matches an additional 4%. Even with putting in 16% towards retirement, I feel like I should be putting in more, but for now I'm focusing discretionary monies on real estate and travel, before I settle down and have a family.

Good for you.  pretty much in the same boat.  I put in 10% and company matches 3%.  Bought some additional company stock, bought a chunk of bare land in BFE that we want to put a cabin on one day, and pretty much minimal debt besides the mortgage.


Not bad. I picked up some oceanfront acreage on an island in the Puget Sound just this spring (for pennies on the dollar). Next I need to save up some extra cash ($10k) to pay for a share of the island's water rights, and then think about putting in a cabin of my own. I'm thinking something from www.fabcab.com would be spectacular to look over the water, with a view of downtown Seattle to one side, and Mt. Rainier on the other. I even have mooring rights to put a buoy out and keep my sailboat just offshore. I too still have a mortgage payment on my house, but with it being a 15-year 3.15% fixed, with a monthly payment of $600 = I'm not in much of hurry to pay that off right now. It would be nice, but interest rate is so low, I'm putting a lot more into it a month than paying to the bank in interest.

I'm amazed at how many people there are out that that don't realize:a) investing a little, over a long time will make you a lot of money. b) up until a month ago, interest rates on loans were almost nothing. c) there are some amazing deals in real estate right now.
 
2013-09-07 02:00:32 AM

HempHead: HeadLever: HempHead: Year is not over yet.

nope, it might even be higher by year's end.  or not....

October is going to be a cruel cruel month as the the QE "taper" happens.


Some have predicted doom and gloom in the markets since they recovered from 2008.
 
2013-09-07 02:43:08 AM
high six figures after 7 years..maybe urdoing yours wrong subtard

//65k gross a year
///roughly 30% to 401k
///no kids, own house and car
////suck it "happy" people"
 
2013-09-07 03:20:22 AM

tbhouston: high six figures after 7 years..maybe urdoing yours wrong subtard

//65k gross a year
///roughly 30% to 401k
///no kids, own house and car
////suck it "happy" people"


So you are saying your money is worth 8 times more than the principle over a 7 year period?
 
2013-09-07 09:06:40 AM
whole lot of old people who make 60k + in this thread think things are still the way they were when they were 30.
 
2013-09-07 11:39:39 AM
One of the problems with 401Ks is that, rather than have a rough estimate of what your future pension will/might pay, you have the S&P/NASDAQ/Dow go up and down, with the media commenting on it throughout the day.  This past few weeks I've seen daily gains or losses in my 401K on the order of $5000, and as a scaredy-cat investor, it makes me a bit nauseous.  However, knowing teh maths, I stick to it.

My retirement will purportedly consist of my 401K, a smallish pension, my house, my after-tax investments and SS.  If all these exist (and even if future SS means-testing robs no more than 50%), I'd be fine, but I've always assumed that at least one of these to be zeroed out through stupidity/malfeasance/general badness.  However, in the past few years I've started using the assumption that any two of these might disappear, so I'm looking into "scratchers" and "male prostitution" as additional ways to diversify my investments.
 
2013-09-07 12:40:21 PM
So is that why the administration wants to take away all your 401Ks and give you a monthly dole instead?
 
2013-09-07 01:25:15 PM

IronTom: So is that why the administration wants to take away all your 401Ks and give you a monthly dole instead?


Huh?
 
2013-09-07 01:39:22 PM

rnld: IronTom: So is that why the administration wants to take away all your 401Ks and give you a monthly dole instead?

Huh?


I believe the theory is that Obama, the sekrit Muslim, will be rounding us up and putting us into FEMA camps; this would be preceded by the gummint taking all of our 401Ks away to fund death panels, forced abortions and requiring that we all marry our turtles.  Which will be preceded by Nancy Pelosi coming to everyone's houses to take their guns.  The word "Dole" was erroneously not capitalized; the only food we'll have in our camps is canned pineapples, as a way of returning the favor to the governor of Hawaii for faking Obama's birth certificate.

Geez; this stuff is so obvious.  I'm not sure why you didn't know this already.
 
2013-09-07 01:46:51 PM

mofa: rnld: IronTom: So is that why the administration wants to take away all your 401Ks and give you a monthly dole instead?

Huh?

I believe the theory is that Obama, the sekrit Muslim, will be rounding us up and putting us into FEMA camps; this would be preceded by the gummint taking all of our 401Ks away to fund death panels, forced abortions and requiring that we all marry our turtles.  Which will be preceded by Nancy Pelosi coming to everyone's houses to take their guns.  The word "Dole" was erroneously not capitalized; the only food we'll have in our camps is canned pineapples, as a way of returning the favor to the governor of Hawaii for faking Obama's birth certificate.

Geez; this stuff is so obvious.  I'm not sure why you didn't know this already.


That explains it!
 
2013-09-07 05:13:29 PM

HeadLever: Yep, subby. All the system's fault.  Has nothing to do with this.  Personal responsibiltiy is only for others, amiright?

[www.creditwritedowns.com image 570x371]


What happened to interest rates in this time?

When interest rates were high, it was rational to save.  When interest rates plummeted, it is now rational to borrow money.  People who aren't maxing out their HELOCs or taking out long-term mortgages now that interest rates are at historical lows are fools.

We need to crank up interest rates to 1985 levels.  It will make real estate prices sane again, and it will encourage savings again.
 
2013-09-07 08:11:40 PM

rnld: A company sponsored 401K plan usually has high fees.


Maybe I have just been lucky, but the company-sponsored 401k's I've had (thru Fidelity and Charles Schwab) have had zero fees other than the mutual fund expenses. There are plenty of index funds available that have expense ratios of like 0.15% or so. The other funds are still around 1% or so. Are most 401k's worse in this regard?
 
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