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It doesn't take much time at all and almost no planning. There are the "couch potato" investing plans -- between 2 and 6 index funds and other than rebalancing once a year (which should take about 30 min max) there's nothing else to do other than have monies deposited automatically on a scheduled basis, whether it's a couple times a month or once a month. The idea is that by doing just that, and letting those monies continue to stay invested and dividends reinvest, one's nest egg builds and builds over time.
And in one's 401K many plans now offer "target date" funds, meaning you select the 1 fund that closely matches the year you expect to retire and contribute into that fund with each paycheck (which happens automatically). The fund's allocation of equities and bonds is adjusted over time to become more conservative the closer one gets to their target retirement date. This is another "set it and forget it" type of instrument.
The reality is people are uninformed about how easy it is and how important it is to save for retirement.
The most important thing to note is that cutting your spending rate is much more powerful than increasing your income. The reason is that every permanent drop in your spending has a double effect:
- it increases the amount of money you have left over to save each month
- and it permanently decreases the amount you’ll need every month for the rest of your life
Lower income folks have much less play in the area of cutting. Growing income is a very powerful part of the equation
To me it would appear you have no idea what a ponzi scheme is.
What you mean is youd rather have someone else take on your savings/retirement risk and not be responsible for your retirement
Yup.
I wouldn't trust most companies with a defined benefit. Closest thing I'll likely see is social security which isn't a defined benefit but has some characteristics of it. I trust the social security administration more than most companies when it comes to handling that, which isn't to say I trust them any. I figure they're good for around half to 2/3rds of what they're currently paying. I mean, I'm still looking at a good 38 years, maybe 40 until retirement. If I don't get that half of what they say they'll pay now the way things are right now my retirement will be on the meager side but doable. That's all fairly wishy washy as it's projecting 30 years out but yeah.
That said, kind of duh. Lower income people are generally less financially responsible and thus less likely to bother saving for retirement. Lower income people generally have more immediate needs for money thus making it more difficult to make the decision to save for retirement.
03-15-2016, 11:36 PM
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n/a posts
Quote:
Originally Posted by Lycanmaster
Our economic system is just one huge Ponzi scheme IMO...
How much of the population really wants to spend the time and energy needed for retirement planning and research, which stock market investing seems to require??? Get real, people...
People really need to look up what a Ponzi scheme actually is.
As for the "time and energy needed for retirement planning" that's what, about an hour or two initially and then 0-5 minutes per year? With a target date fund, it's even less time/effort.
People make this way more complicated than it actually needs to be.
Lower income folks have much less play in the area of cutting. Growing income is a very powerful part of the equation
It's both. People have a tendency to inflate expenses as they go up in income which doesn't necessarily help you any for retirement. If you go from making $20,000/yr to $80,000/yr and just keep consuming everything you're not any better off in retirement aside from a bigger social security check, which is what a lot of people end up doing. On the other hand, cut all you want on $20,000/yr and it's really just not enough to save for retirement on. Say you cut 10% and save that, which is much harder to do on $20k than $80k, it's still $2k/yr. That's never going to be enough. Completely futile to rely on cutting spending alone at that income level. You can't save your way out of near poverty. You need to earn your way out of it.
People really need to look up what a Ponzi scheme actually is.
As for the "time and energy needed for retirement planning" that's what, about an hour or two initially and then 0-5 minutes per year? With a target date fund, it's even less time/effort.
People make this way more complicated than it actually needs to be.
I think also spend less time on the internet predicting Amagardon and more time learning about investing is a better use of everybody's time.
The idea that most of America can fund a retirement even coming close to what they'd get if they had a pension is laughable.
At the end of the day, there is no one else to fund it. Remove the illusion that someone else is paying for it. There is no one else. That money for that defined benefit pension has to come from someplace, and that someplace is the rest of us.
the sooner you learn to deal with that fact and do what you need to do to prepare even if it means working weekends and the less complaining about it you do the better off you will be .
instead of wasting time posting doom and gloom threads and high fiving others who are whining about their situation too , that time can be far better spent in other forum sites learning and getting ideas from those far more successful.
there is one early retirement forum quite a few of us here frequent filled with some of the smartest folks in this subject . many found ways to retire early and others are still working on it sharpening their skills , ideas and creativity from other's a whole lot smarter then they are or i am .
if you think poor you will be poor !
90% of what i bring to these forums here i steal from those a whole lot smarter then i am .
our brains will always talk us out of doing anything that involves risk if we let it . the human brain hates losing money more then it likes making it .
that causes us to do the wrong things at the wrong time . but the average person has no clue this is how we are wired .
i almost let my brain talk me out of entering the most incredible real estate venture because it pounded me nightly with all the negatives of committing so much borrowed money to buying in .
but through this other forum i already knew about jason zweigs research with modern brain imaging equipment so i was smart enough not to allow my brain to paralyze my actions .
Last edited by mathjak107; 03-16-2016 at 04:44 AM..
Our economic system is just one huge Ponzi scheme IMO...
How much of the population really wants to spend the time and energy needed for retirement planning and research, which stock market investing seems to require??? Get real, people...
Our economic system is like most other systems. Some people do well, some people don't. Just because someone doesn't succeed it doesn't necessarily mean the system was rigged. A lot of people have no marketable skills or talents and complain that the system is corrupt because they can't get a job that pays well. It's more like they don't understand how the system works.
It really doesn't take any time at all to manage a 401k or IRA. All the brokerages have target date funds for this exact reason, people who don't want to spend time managing it. It will set up the investment allocation for you based on what your risk tolerance should be at that stage of your life. I pick my own funds and even that doesn't take much time at all. 401ks are pretty much set it and forget it, you only need to check back at very infrequent intervals to make adjustments.
Lower income folks have much less play in the area of cutting. Growing income is a very powerful part of the equation
Ironically, lower income folks tend to have lots of cable TV/satellite and use expensive cell phones and cell plans and there are easy and painless ways to cut expenses from just those 2 things that would make an impact on the amount of $ they keep.
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