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Suzy Orman suggests that if you are struggling right now to forgo the 401K contribution and instead keep this money usable in an emergency fund.
When things get stronger for you both then you can go back to investing. I know some companies that stopped matching the 401K contribution. Not sure the status of everyone's company policy here but many hotels stopped the Match Program.
Unfortunately , most people change during a lifetime of working. These changes affect how things will be when they retire. Young people do not know now , and security is but a fleeting falshod.... The first thing is they get divorced , maybe several times , then the get transfered, change jobs, move far away, so even buying a home , may not mean all that much later on.
The vast majority of folks do not get really serious planing for retirement until they are 45-50 , just the way it is, and even then , as we have seen , often it all goes south anyway . Health reasons can be huge factor.... As an earlier post said , material things are the best investment, like a homestead, collectibles that grow in value , and a side business like Ebay , that can follow you anywhere through life.
The DJIA has gone from 2000 points to 10500 points in that time. For folks that are younger, like me, in the last 10 years it's gone from, wait for it, 10500 to 10500.
It's not you being special it's the market. Anyone can retire when they are investing in one of the single biggest runups in history.
Your forgettig that the present generation went thru the 70's recession of not only high unemployemnt but double difit infaltion at the same time and mucless governamnt support.Thehn the 80s' recession. The OP is 32 and has time to recover. The best thing is she and husband are thinking about it whhn many do not until their mid 40s' That is important has it takes a plan.
Then you might also loose it all just like happened to folk's in the recent stock market crash.
The only people who 'lost it all' are those that sold at the bottom. These people probably shouldn't be in the market to begin with, as you do not "sell low and buy high".
Money in the stock market (in a retirement account) should be money you don't need for years. If that is the case, you wouldn't care what it is doing right this minute. If you have weak hands, panic, and sell--then you are wall street meat, who shouldn't be there to begin with.
Right, you are playing it safe. You have the nest egg. Those that don't (like me) have to put an extra large portion of their income into savings (I've saved an average of 50% of gross income since graduating college) to play it safe moving forward.
It was all about timing and those that were in it from 1980 thru 2000 did really well. NO ONE could lose.
America is done. That same acceleration will happen elsewhere in China and Latin America. Fortunately, I see it coming.
hind site is great...you should have been around for the crash of 1987...we saw 26% of our life savings evaporate in one afternoon..
no one knew what to expect or if the markets were ever coming back.it was like the crash of 1929 all over again in appearence...
then the recessions of the 1990's were killer... there never is a time where you can say things look great because that is when we drop,..
all the biggest drops come when things couldnt look better and markets are making new highs..then out of left field BOOM......
all the biggest gains come from when it looks like we are going to hell in a handbasket, when things look hopeless and the light at the end of the tunnel is the train.
I am also 32. You are in GREAT shape. The past 10 years are your foundation. You bought shares in a up and a really down market which will benefit you dramatically. Reason for not taking advantage of 401K? Even if you are contributing, it will help a lot.
The good news is that you kept buying in that down market right? If yes, you bought shares at a very cheap price.
How much is the company match?
You have plenty of options. Consider a Roth IRA. Read about this plan. Its similar to 401K.
Quote:
Originally Posted by Miss Crabcakes
So the husband and I were talking about retirement and he is starting to believe that won't be a reality for him and I wonder for myself.
Here are our stats and if you have advice on improving things, feel free to jump in:
- We are both 32 years old
- I have had a 401K for about 10 years, the hubby has not opened one for several reasons (job didn't offer it or he made too little to contribute anything)
- I have only been able to contribute 5% and my balance grew to a high of $19k before the financial crisis in early 2008. It has not gotten back up to that amount since.
- I lost my job in Dec 2008 and have not been able to contribute to the 401k since. I have only had part-time and temp jobs in the interim (no benefits)
-Hubby also lost his job in 2008, took one year to find a temp job and just went permanent this past January.
- the hubby plans to open a 401k but won't be able to contribute much (he doesn't earn much and has little leftover after bills)
- I still don't have a permanent job and don't know any other way to add to my 401K or any other retirement plan and as it stands only have about $17,000 in my current 401k. I also don't know much about stocks.
Are we just screwed and will never retire? Any other options or advice?
The only people who 'lost it all' are those that sold at the bottom. These people probably shouldn't be in the market to begin with, as you do not "sell low and buy high".
Money in the stock market (in a retirement account) should be money you don't need for years. If that is the case, you wouldn't care what it is doing right this minute. If you have weak hands, panic, and sell--then you are wall street meat, who shouldn't be there to begin with.
yep, those that bailed and ran got their lunch handed to them.. some of the suff i bought thru the lows is now up over 100% in one year... im about even overall to before the down turn at this point...
i did quite a bit of adding more money and alot of rebalancing...
I have no idea what this means. I am stock illiterate.
the best advice your ever going to get from anywhere is this. its time to become un-illiterate about your financial future and about investing and money.
start learning or taking courses... before i met my wife she was also illiterate about finances,she was a widow to boot.
the guy at the bank put her in all tech and dot com funds and her not having a clue and expecting everyone to do things for her in her interest went with the plan.
SHE GOT SLAUGHTERED.....
after we met i made her watch all the financial shows with me, i forced her to read pages in books i read... little by little she began to understand all this stuff... today im real proud of her,she has complete understanding of everything in our portfolio. she understands why we have it and why we got rid of other things that didnt meet our objectives.
she understands whats good and bad in financial products and im sure that with or without me now this woman will not be easy prey ever again.
its important you start to learn your basics, you shouldnt know more about your car or refrigerator then you do about your financial well being ....
Your focus for your later years is all wrong. Way, way wrong in fact.
Why?
Common wisdom is to save as much money as possible but that's a lie that benefits the banking/investment community. What people need to do is to secure a safe paid for place to live in a good low profile community that has good medical care facilites close by with enough activities to stay busy.
By securing your "homestead" you ensure that you will have a place to live when you are either no longer able to work or don't want to work. Paid for cars, home equipment etc. will all be a better investment than money saved up loosing value everyday you don't use it. Then you might also loose it all just like happened to folk's in the recent stock market crash.
Things and places are better place to put your money until you have taken care of your older years. Note:do so with a plan not willy nilly.
DEATH EARS ! More than likely this good advice will be ignored . I tried to tell all my kids , and my nephew to do this very thing about 5 yr.s ago . Instead they bought huge money pits , now they are all upside down on morgages .
My nephew came into $245,000 . I told him then to buy a small piece of land put small house or even mobile home on it .The buy the other place if he just had to . Now they are losing all the money they put into new home and are broke .
People now a days have never had to really suffer through bad times .
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