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During the 1980s and 1990s, there was much financial discussion about how nobody could retire on savings alone. You had to invest early and wisely, use the power of long-term compounding, and plan ahead. I wonder what the current advice is now from financial planners, given the "new world" we now live in? How are we supposed to deal with these changes:
--Pensions will soon be totally gone in private-sector employment (and can legally be voided at any time by a simple "change of control").
--Social Security benefits will be minimal, if anything, for those born after 1960 (the Trust Fund has been spent and is now EMPTY).
--Wages stagnated in the 1970s, and opportunities for promotion and advancement have been extremely limited ever since.
--The work week is now 80 hours a week for many corporate jobs, so extra jobs and part-time businesses are out.
--The number of jobs in America has continued to contract, while the working age-population constantly and significantly increases.
--Costs of benefits, like the skyrocketing cost of health care and insurance, have been increasingly shifted to employees.
--The dollar is being massively devalued by the Fed, so every dollar saved is worth less and less every year.
--Cost of living increases every year, governments at all levels are taxing to the maximum.
--Interest rates have been kept at near-zero levels for decades now, since excessive government borrowing requires minimal interest rates.
--Any investments available to the Middle Class are full of costs and fees, produce minimal returns and are at extreme risk of losing principal.
except for 1 or 2 points none of this is fact across the board. different point may apply to different people just as it always has but for the most part its your opinion,prediction or what you think in your own head.. in fact most of what you think just isnt true. in fact its believing your own bull-shi* like this that will stop you from doing that right thing and maybe even committ your own financial suicide by never acting. especially the part about its impossible for the middle class to make money investing. thats pure bull.
even the last decade produced normal 9% plus ,results without even trying very hard and thats with 2 recessions back to back and the mother of all drops..
if you loaded up on all large cap stocks and nothing else you had sub-par returns but as long as you mixed it up you did just fine.
Last edited by mathjak107; 07-05-2011 at 03:40 AM..
You just have to closely watch your portfolio in this volatile market. Make lots of tweeks.
Because of Obama, our taxes have gone down and we now have affordable Obamacare.
Savings account Interest rates were as high as 6% in 2007.
You have to do your homework for low cost investments.
The problem is the consumer. Stop spending and you will be ok. Live below your means and you will be wealthy.
affordable obamma care? for who? my health insurance in a high deductable hsa jumbed from 88 bucks a week to 181.00 a week and thats with a 2500.00 per person deductable or a 5k deductable for family. its a freakin joke this obama care.
getting back to the origonal article there is a flaw in all these withdrawl workups from fire calc to the ones in this article .
the flaw which they briefly mentioned is that they all try to give give us some kind of fixed percentage withdrawl amount based on market returns that are anything but fixed.
thats the real problem in predicting this stuff. there has been lots of studies done using variable withdrawl methods based on returns but they are just to complex for joe and mary public to hang a hat on.
soooooo right or wrong the easy to remember 4% rule reigns as king when at this point it was over thrown quite a while ago.
Lets assume $25K a year from $1 Million and then adding up to $2.5 million at the most.
Where will you get the million to be able to draw from?
What is your road map to a million.
If you plan to retire at age 55, you have maybe 22-24 years left....
In 2008 no one knew how market would in 2009. So why take a risk and keep in stocks when you are going tor retire the following year?
If you were going to retire the following year you asset allocation should have already been close to where it needed to be without the kneejerk (and foolish) sell at the market bottom to get your stock ratio where it needed to be. If anything your asset allocation for your retirement years would suddenly be out of wack with stocks too low, so buying stocks would have been the correct thing to do when you rebalanced.
You are one of the few people I'd recommend hiring a financial advisor.
i would 2nd that.. ole tex is running on bits and pieces of mi-information he gathered up and it will harm him.
either start reading books by those who know or get someone to help him but he is basically just a drift in his investments with no real plan or strategy.
and no, bailing a year before you retire from an all stock portfolio isnt a strategy. hope isnt a strategy either.
while anyone can throw money into equities and let time do its thing and come out a winner ,retirement planning is soooooooooooooooooooooooooo difficult.
for months now i have been posting different ideas, thoughts, and methods to serve as food for thought so those who are getting close understand that the spending down or the decumulation stage of our lives as its known is very different from the accumulation stage. you damn well better learn about the 2nd half of the game because following the rules and strategies of the accumulation stage will put you right in the failed retirement graveyard.
folks have to get all the myths and wives tales as well as preconceived notions about certain financial products out of their head and open their horizons to new methods and products or they will fail following yesterdays news .
generating a reliable income stream today for a lifetime has become a very difficult task even for the best schooled on the planet. folks like us stand no chance without opening up our minds and eyes.
Last edited by mathjak107; 07-05-2011 at 09:30 AM..
You made a statement about people who were in equities in 2008 and wanted to retire in 2009/2010 getting wiped out. I responded that I was one who was in equities in 2008, retired in 2010, and not only wasn't wiped out, but that my portfolio is higher than it has ever been. You then come back with a non sequiter about the bull market beginning in March 2009.
What point are you trying to make?
What if they retired in March of 2009? They did get wiped out with the 2008 crash if they stayed in Stocks.
then they belong in a bank not in equities. they need to cut their income expectations from their nest egg and only take relatively risk free chances if they have no tolerance for volatility.
Right, they belong in the bank and/or Bonds too. They did not and got wiped out.
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