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Old 08-11-2014, 05:55 PM
 
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Originally Posted by mysticaltyger View Post
Just because the plan was managed by CitiBank doesn't mean anything. What was the name of the fund(s) you had the money invested in? Balanced mutual funds (and target retirement funds) own a mix of stocks & bonds, by definition. They did not get hit as hard as funds that invest only in stocks. Balanced and Target Date funds are the ones most people should be investing in for retirement. Not 100% stocks. Definitely not 100% in only one or a couple of stocks. I also don't agree going the opposite extreme....Bonds are ok to a point. Even young investors should have some bonds in their portfolios, IMO. But having all or most of your long term money in cash, CD's etc. is not smart, as interest rates are not keeping up with inflation. Yes, you need to have cash savings outside your retirement plan, but inside the plan, cash should be a small or non-existent part of your retirement money. But despite all that, the stock market has totally come back since 2008. So just about any stock mutual fund you invested in would have come back by now if you had stayed with it.



In general, I agree on the point about minimum wage earners. But the point is, if you earn minimum wage your whole life, you most likely have some major problems (drug/alcohol/psychological/emotional) preventing you from earning a decent living. Very few people earn minimum wage their whole working lives.
There is another reason why one might find themselves locked in to a minimum wage all their life. That is spending their valuable time arguing with people on online forums about why the system is broken and people can't get ahead with none of the blame on them.
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Old 08-11-2014, 06:02 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by s1alker View Post
It don't help that pensions are becoming a thing of the past. 401ks are only good for those who make 100k+ a year or more and can funnel a lot of money into it. The biggest issue is that people are living longer than ever and could easily have a 30+ year retirement.
I've never made 100K a year, barely made 50K a few years before my pay was cut and I live in a high cost area. I started saving from day one in the plan, as well as setting up regular & Roth IRAs for myself over time.

Most people are broke because they start out with all of the things they want to have/do and think they will "some day" get to making enough money to where they can save. This way of thinking almost never works. Even if you do get that job paying 100K, your wish list expands to match your income, and folks who think this way put little or nothing in their 401ks. It actually works the exact opposite. You ask yourself: "How can I set up my life/lifestyle so that I can save?" And you work from there. And you do whatever it takes to have extra money. If you make minimum wage and you have to share a 1BR apartment (as I did for a while) and ride your bike to work because you can't afford a car, you do it. If you need to make more money, but can't find a job where you live and you have to move to North Dakota, you do it, etc.
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Old 08-11-2014, 06:08 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by Giesela View Post
IDK, I'm a couple years away from retirement and my govt '401k' has done nothing but lose me money over the long haul.
Recently it was up, but the market is going to go down again. How can I plan on retiring when my 401k keeps going up and down? I put about 25% of my salary in there! and honestly? It makes me feel more stupid than just burying it in the back yard but I keep doing it because everyone says to. I think the market its for the rich, which I am not. Double stupid.
People who say stuff like this are almost always ignorant of the basics of investing. Typically, they don't know a stock from a bond from a mutual fund. In the age of the internet, anyone can look up stock market performance of recent years and prove you wrong. Granted, stock market performance hasn't been great over the last 15 years, but it has been positive and certainly beats what a savings account would have done. Same for bonds.

Someone who invested $100 per month in the Vanguard S&P 500 Stock Index fund (stocks of 500 largest companies in the U.S.) starting 15 years ago would now have $33,435 in their account. They would have invested $18,000 of their own money and the rest of the balance would be due to growth in the account.

Dollar-cost Averaging Calculator Results
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Old 08-11-2014, 06:12 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by MrWillys View Post
Is this an attempt at a credible argument about the thread topic? Please expound on why people shouldn't have a family? Are you saying people that work at Walmart shouldn't have kids?
Yes, if a low paying job from WalMart is their main source of support, they absolutely should not start a family. Why would you want such a shytty life for you and your kid(s)?

People always like to talk about the security offered by the European welfare state. But Europeans have a lower birth rate than Americans. And they don't pop 'em out as teenagers like Americans do. A lower birth rate is part of the reason why Europeans are more financially secure. Americans should do the same if they don't make much.
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Old 08-11-2014, 06:17 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by MrWillys View Post
Where in the Constitution does it say only the affluent can afford children? Honestly, that's the basis of this argument. To say that poor people shouldn't be allowed to have children is a flawed ideal.
The Constitution allows people to make bad decisions and live with the consequences of them. People can do whatever they want, as long as they don't expect other people to subsidize their choices. Anyone who uses their brain knows that their lives are going to be stressful if they don't make much money and go ahead and have kids anyway. Is this really that hard to figure out?
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Old 08-11-2014, 06:25 PM
 
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Originally Posted by Tallysmom View Post
Ha, Mystie -- you don't need to tell me that. I live in a city that votes in every single cockamamie parcel tax it can, because the city population is 60% renters. And "renters don't pay parcel taxes".

Then they wonder and yell about their rent going up every year.
Heh, this renter realizes he pays parcel taxes. Just because they don't break it down for you in a line item doesn't mean you're not paying it....but I know, I know....most people are dumb and I'm the "weird" one for realizing this. It's the same idea with health care....everyone wants insurance to cover everything and then they get mad when their premiums go up...but I digress.
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Old 08-11-2014, 06:28 PM
 
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Originally Posted by freemkt View Post
??? People who are already poor - who have NO retirement savings of any kind - should care why?
They don't. That's the problem. If IRAs and 401ks get raided, then that's less money for the savers to spend, which means fewer jobs, etc.
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Old 08-11-2014, 06:42 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by Yakscsd View Post
This was the wisest man here IMO and I'd do the exact same thing. He enjoyed his life, did everything while he was young and could enjoy it. As we age it simply is harder and for some, there are activities that we enjoyed at 30 or 40, that now at 70 we cant do. He may not even live to retirement and that would have been a shame to scrimp and save for an early death. He took a sure bet by living for the day.
Oh, someone always posts such nonsense...as if there's no happy medium between "living life to the fullest" and "scrimping and saving for an early death".

Hey, I'm cool with people doing whatever they want. But don't whine and complain at 64 that you only have a skimpy Social Security check to live on and that life/America isn't fair and/or vote for other people to subsidize you in old age....and that's usually what happens. Almost no one who's old with no money says..."I lived life to the fullest and now I'm broke in old age as a result and I am good with that and don't expect any more than the measly SS check I live on.". Just. Doesn't. Happen.
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Old 08-11-2014, 06:50 PM
 
1,734 posts, read 1,954,117 times
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Quote:
Originally Posted by nicet4 View Post
Three illustrations I put together as one earlier this year.



What is surprising is the number of people (44%) taking social security at 62 and the over half who took it at age 63 or under.

I'm 66, still working and not collecting social security yet with the minimum goal of putting it off to 67 1/2 (just a year and a half away) at which time my wife will be FRA and can collect a full 50% of my FRA benefit if I file and suspend. My ultimate goal is doing that and be one of the few to go to 70.

...

Like many of you we do have savings but it isn't anything near a million bucks or anything like that. Maybe if I had a million I may have retired at 62 but for me retirement was never a goal to be strived for. Not saying planning isn't important, it certainly is especially when you enter your 60's, but it shouldn't be the end all goal when you're 40 and 50 with kids in college etc.

Working a little longer can make up for a lot of past sin of not saving.
Nicet4 - respectfully, the world changed for most of the formerly middle class once offshoring began in earnest in the mid 90s. At that point, what some of us fondly remember as the social contract between employers and employees dissolved. If you had the misfortune to be 50 during the 1999 recession, and thus targeted for an economic layoff ("get rid of the high pay scale guys and replace them with youngsters...better yet, load up the remaining department members and enjoy the savings. If you can't load the survivors up any more, send the work to India.") you had a better than even chance of never working again. The remaining 50% found jobs after a year or more of looking that paid 1/3 to 1/2 of what they had previously earned.

Given a circumstance of economic 'rightsizing', how likely is it that the 'rightsized' would NOT have taken early SS twelve years later, in 2011, as soon as they qualified for it when they were 62?

This is what happened in nearly all of the old-style industrial states, during the glorious switch to the service economy. By the time most people who had been 'rightsized' figured out that they would never work again - at least at their former levels - it was several years. Very few of them had reduced their spending to correspond to their immediate lowered incomes - thus further decimating the 401Ks and savings. Add to that, those who had kids in college when they were 'rightsized' would likely have bitten off their arms rather than have the kids cut short their educations. By the time age 62 came around, the reduced SS payments likely meant the difference between living in a junker, vs. in a rented room.

We here on C-D are shielded from the stories these people have to tell. Why would they ever sign in, to be preached at for not saving? They feel bad enough, and likely have little energy left for corresponding with strangers. I can tell you from observing fellow citizens in my de-industrializing, Northeast, high tax, heavily unionized former state, that there are more than a few that fell into this boat.

I was not of that age in 1999. However, I'm convinced that I only escaped the same fate by a hair by watching, smelling the coffee early on and getting the heck out of Dodge before I fell into the targeted group.

When companies are dissolving divisions and relocating entirely, your skill set and accomplishments have nothing to do with it. You are a number, and your only defense is to get out and go elsewhere with a different business model. Even a 1% lesser unemployment rate makes a discernible difference when you are feet on the ground, pounding the pavement. People don't do this because they think they are exceptional, can beat the odds, will find another $100K job in the next couple of months...and when they don't, they no longer have the fearlessness or funds required to leave.

Lesson: Be alert for the smell of coffee. When you start smelling the coffee, lose your pride. Be the first in your neighborhood to sell your house, take the money or the hit, and get mobile. You'll get 40% more for the house if you are first to sell, than in the same neighborhood six months later, now filled with foreclosures and FOR SALE signs. Oh- and ALWAYS have a mental map of where the unemployment rates are a minimum of 1% lower.
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Old 08-11-2014, 06:51 PM
 
26,178 posts, read 28,581,435 times
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Quote:
Originally Posted by Yakscsd View Post
He can check out any time he wants and have had a great life. There's nothing great about being 70 and having money, that's actually pretty sad for most situations IMO.

I'd completely regret have made decisions to save money and not do things when I was in my 30's to 50's because I had to save for a mythical retirement.
Most people can save 10% of their income off the top without really changing their basic lifestyle (and it's really not even 10% if it's going into a tax advantaged 401K because of the tax savings). Shop a little smarter at the grocery store. Spend time researching the stuff you buy (instead of just going out and randomly buying it). Less impulse buying. Most people who spend everything they make blow money on stuff that isn't even making them happy. They have closets full of clothes they almost never wear, etc. (Heck, even I have clothes I almost never wear and everyone considers me frugal!)

Your basic assumption that people who spend everything they make to "live life to it's fullest" is fundamentally incorrect. It just proves that you are like most humans. You are bad at predicting what will make you happy (as psychologists who study happiness have learned). Our brains aren't wired for happiness....they're wired for short term survival (which is nothing like happiness).

.....Most of the research on consumer finance shows the same thing: people can usually save a lot more if they make saving a priority. Most people don't. Savings is an afterthought--it's the residual of whatever hasn't been spent on clothes, groceries, cars, dinners out, school trips, travel soccer team, college tuition, vacation, etc. Unsurprisingly, there's frequently no residual. However, if people decide how much to save, and then budget their consumption out of what is left, they suddenly realize that they could drive an uglier car, take the kids out of dance class, live with the kitchen the way it is, stay home for a week in August instead of going to Disneyworld, and so forth. And those people are not, as you might think prospectively, made desperately unhappy by these sacrifices. Savers are actually happier than the general population--in part, one assumes, because they're less worried.


http://www.theatlantic.com/business/...w-year/250554/
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