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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
    More: Fail, pension plans, saves, Economic Policy Institute  
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1581 clicks; posted to Business » on 06 Sep 2013 at 11:38 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



206 Comments     (+0 »)
 
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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.
 
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