U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 08-22-2007, 02:16 PM
 
30,072 posts, read 47,320,143 times
Reputation: 16023

Advertisements

has anyone considered how this 10-15% drop in most people's portfolios will translate into real people making withdrawals from their retirement accounts?

I am worried not because we are living from 401K/IRA withdrawals but my husband would like to retire in next couple of years and his company does not do a pension--so it is Social Security and what ever we have saved that will see us through...we will have to see some pretty good market upside to replace what was lost in this slide...and there is no guarantee the market will good up substantially in the future...

If most guides recommend to withdraw max of 4% from retirment accounts so that you don't overdraw and wind up outliving your funds---what happens when you are making those withdrawals and the market does drop significantly--this is the biggest % drop in a decade ---right? and I don't see it getting back to 1400 within a year, if that--but I am not a guru...just think the downturn will be slow to be erased...

I know that once you start to take dispersements that you really can't stop or face some kind of penalty--but now the money they take out is %-wise worth more in total value of portfolio than it was say in March...
1000 is a high percentage of a 400,000 portfolio than in a 500,000 one---4% of 400,000 is 16,000 and 4% of 500,000 is 20--that 4000 can make a significant difference in people's lifestyles...
plus every dollar that is taken out of the account is one less dollar that works to gain increase from its investment value...

so does anyone know/guestimate how that aspect of the drop will affect people and the economy?
Reply With Quote Quick reply to this message

 
Old 08-22-2007, 02:36 PM
 
Location: Sacramento
13,784 posts, read 23,805,237 times
Reputation: 6195
Quote:
Originally Posted by loves2read View Post
has anyone considered how this 10-15% drop in most people's portfolios will translate into real people making withdrawals from their retirement accounts?

I am worried not because we are living from 401K/IRA withdrawals but my husband would like to retire in next couple of years and his company does not do a pension--so it is Social Security and what ever we have saved that will see us through...we will have to see some pretty good market upside to replace what was lost in this slide...and there is no guarantee the market will good up substantially in the future...

If most guides recommend to withdraw max of 4% from retirment accounts so that you don't overdraw and wind up outliving your funds---what happens when you are making those withdrawals and the market does drop significantly--this is the biggest % drop in a decade ---right? and I don't see it getting back to 1400 within a year, if that--but I am not a guru...just think the downturn will be slow to be erased...

I know that once you start to take dispersements that you really can't stop or face some kind of penalty--but now the money they take out is %-wise worth more in total value of portfolio than it was say in March...
1000 is a high percentage of a 400,000 portfolio than in a 500,000 one---4% of 400,000 is 16,000 and 4% of 500,000 is 20--that 4000 can make a significant difference in people's lifestyles...
plus every dollar that is taken out of the account is one less dollar that works to gain increase from its investment value...

so does anyone know/guestimate how that aspect of the drop will affect people and the economy?
Well, I like that 4% rule myself, it really negates the problem of outliving your money. I'm OK with kicking it up to 6% when you hit your late 70's, at some point your problems kind of "go away", unfortunately.

What I would suggest is you have a set point in time, say December 31st, and whatever your aggregate investments are at that moment, you can take out 4% the following year. Another strategy, if that alarms you, is to have four set points, say the end of March, June, Sept and December, and take out 1% of what you have invested at those dates, allowing you to accommodate market swings.
Reply With Quote Quick reply to this message
 
Old 08-22-2007, 03:14 PM
 
30,072 posts, read 47,320,143 times
Reputation: 16023
what i meant was what about people who will take money out and now have to change their withdrawals--is that amount set or is there flexibility with how much needs to be taken out...
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top