U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [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)
Reply Start New Thread
 
Old 10-26-2008, 10:32 PM
 
1 posts, read 2,896 times
Reputation: 10

Advertisements

I have been contributing 15% into my company sponsored 401K plan for the past 11 years. My selections are diversified and I monitor its progress regularly. The plan took a big hit in the early 2000's and a bigger hit just recently with the current market fallout. The highest value my 401K ever reached was $61,000. Today, it is valued at about $32,000. I have consistantly contributed 15% of my income and my company matched 3% and it has consistantly lost more than it has ever made. Just when I start to see some growth, the market turns and the value drops drastically. I am 42 years old and would like to retire at 65. To be honest, I don't see how that will ever happen with a 401K alone. The numbers simply do not add up. My income is average, about $55,000 to $60,000 a year. Being single, it is not possible to save more than 15%. I have very minimal debt and no car payment, and I still cannot save money outside of the 401K for a down payment on a home. So, yes, there is constant worry and anxiety about retirement. I also believe that in the future, perhaps 20 years from now, this country is going to have a huge problem with millions of people unable to retire on their 401K savings. They will be too old to work, or unable to find a job due to advanced age, and most will surely out live their savings. Social Security will probably not be around and should not be considered a "retirement plan". I certainly do not mean to sound negative; I consider myself to be a very average, hard working American with a career that I love. Unfortunately, when I do the math on retirement it seems like a fading dream. Does anyone else feel this way or am I missing something?
Reply With Quote Quick reply to this message

 
Old 10-27-2008, 11:36 AM
GLS
 
1,985 posts, read 4,848,887 times
Reputation: 2408
Quote:
Originally Posted by Sailorman1 View Post
I have been contributing 15% into my company sponsored 401K plan for the past 11 years. My selections are diversified and I monitor its progress regularly. The plan took a big hit in the early 2000's and a bigger hit just recently with the current market fallout. The highest value my 401K ever reached was $61,000. Today, it is valued at about $32,000. I have consistantly contributed 15% of my income and my company matched 3% and it has consistantly lost more than it has ever made. Just when I start to see some growth, the market turns and the value drops drastically. I am 42 years old and would like to retire at 65. To be honest, I don't see how that will ever happen with a 401K alone. The numbers simply do not add up. My income is average, about $55,000 to $60,000 a year. Being single, it is not possible to save more than 15%. I have very minimal debt and no car payment, and I still cannot save money outside of the 401K for a down payment on a home. So, yes, there is constant worry and anxiety about retirement. I also believe that in the future, perhaps 20 years from now, this country is going to have a huge problem with millions of people unable to retire on their 401K savings. They will be too old to work, or unable to find a job due to advanced age, and most will surely out live their savings. Social Security will probably not be around and should not be considered a "retirement plan". I certainly do not mean to sound negative; I consider myself to be a very average, hard working American with a career that I love. Unfortunately, when I do the math on retirement it seems like a fading dream. Does anyone else feel this way or am I missing something?
It appears you have already demonstrated consistency in saving habits and you are engaged in long-term planning. Like many, you have been victimized by volatile market swings. You might temporarily reduce your 401K contribution until you get enough down for a modest house. The real estate market is near bottom in many locales, and with extensive research you may be able to pick-up a bargain. Take a fixed rate mortgage which will stay the same while your salary goes up over the next few years. Then gradually increase the percentage into your 401K again.

Remember that other than healthcare, your housing costs will probably be the largest retirement expense. A house with no mortgage and a smaller 401K is a better diversified position at retirement than having all your money in a 401K.

PS Cheer up. With a 20 year timeline you are infinitely better off than many 62 y.o. people with your current your financial status.
Reply With Quote Quick reply to this message
 
Old 10-27-2008, 01:47 PM
 
48,516 posts, read 83,978,960 times
Reputation: 18050
If the 401K is matching funds by the employer I presonally recommend putting the max in.In most you can always change where the money is invested. Afterall other savngs that are different actually returns less during slow markets and in a finanical crisis.Real estate was and is still god in selctive markets.Ialso thi9nk peole need to think about going more conservative as you the fund gets larger and youy near retirement age. Too many got caught with too much in Enron and now with the stovcks down. Preserving those gains is important but especailly when older.Many lost everyhtign in realestate becasue they spent moeny they made and rebought with new bredit. IOver all they did good;they just don't have anything left.Personally I never played the real estate game but just sodl by providence in the up market and bought in a good market currently.
Reply With Quote Quick reply to this message
 
Old 10-27-2008, 04:16 PM
 
Location: San Clemente
1 posts, read 2,855 times
Reputation: 10
Quote:
Originally Posted by Sailorman1 View Post
My selections are diversified and I monitor its progress regularly.
What do you mean by diversified? If they are all "stock market funds" then you're not as diversified as you could be. Have you considered any alternative investment strategies? Investment vehicles exist where you don't get dinged on taxes, and you might make back what you lost relatively quickly.
Reply With Quote Quick reply to this message
 
Old 10-27-2008, 04:34 PM
 
4,948 posts, read 16,531,978 times
Reputation: 2866
I also have a 401K and Ira and Roth Ira, and it is not easy to see the value drop. One thing is
if you do have a company match, that does help. Also you do need to look at what the plan does buy.
The shares of what you have dividends are being reinvested-that does mean you buy more cheaper.

I do think Social Security will be still around. If you just put money in a bank, that also is a no win situation. Donot focus on the short term, and don't check it every day. If you may buy stocks in a tax
free 401K Verizon is at a low, with a great Div. In one way I did luck out with cashing out some at 60.00
to buy a house. They were some stocks outside the 401K.
Reply With Quote Quick reply to this message
 
Old 10-27-2008, 09:04 PM
 
Location: Forests of Maine
30,687 posts, read 49,476,475 times
Reputation: 19134
I have no 401(k).

My employer had a good pension plan, I was forced out from my career field at 42 years old due to 'High-year-Tenure'. I immediately got my pension.

When I was working I also invested heavily into our portfolio, everything tax-free of course.

We learned to itemize our taxes years ago, so we have been exempt from income taxes for over two decades.

I have been retired for 7 years now.

It seems that with this economy, our portfolio has been growing very nicely.

No complaints here.
Reply With Quote Quick reply to this message
 
Old 11-02-2008, 07:06 AM
 
29,784 posts, read 34,885,423 times
Reputation: 11710
The best plan to retire in your early 60's is to do the following:

Take a job with either the federal, state or local government. Stay in that job for 35 years and invest in your 403B. That will leave you after 35 years with a guaranteed pension, full 35 year social security benefits if you contributed (some government jobs don't) and your 403 investments. You may well have full health care until 65 with your former employer providing you secondary coverage after in some cases. Select the level of government with benefits in mind and when you reach your 35 years you can begin to consider when to retire.
Reply With Quote Quick reply to this message
 
Old 11-06-2008, 08:47 AM
GLS
 
1,985 posts, read 4,848,887 times
Reputation: 2408
Quote:
Originally Posted by TuborgP View Post
The best plan to retire in your early 60's is to do the following:

Take a job with either the federal, state or local government. Stay in that job for 35 years and invest in your 403B. That will leave you after 35 years with a guaranteed pension, full 35 year social security benefits if you contributed (some government jobs don't) and your 403 investments. You may well have full health care until 65 with your former employer providing you secondary coverage after in some cases. Select the level of government with benefits in mind and when you reach your 35 years you can begin to consider when to retire.
This is excellent advice for someone younger, but the OP is 42y.o. Based upon your plan they would already be 77 before they could "begin to consider when to retire".
Reply With Quote Quick reply to this message
 
Old 11-06-2008, 09:54 AM
 
48,516 posts, read 83,978,960 times
Reputation: 18050
Normally the average years a 401 are predicted on is 30 years with changing risk strategies in the later years or as vlkaue increases. But I don't believe that just that is enough;people ahve to have savings are more assured. Its like a person investing evryhting in their small business and making that their retirement;it is very risky.There was a PBS special that showed different peopelin teh same 401 plain that the huge difference in theiroutcome by the decisions they made.
Reply With Quote Quick reply to this message
 
Old 11-07-2008, 08:14 AM
 
2,317 posts, read 4,640,505 times
Reputation: 1248
I have a pension...also a 457 account,which is a civil service account,like a
401,the only differenceis you can withdraw when you retire without penalty.
I retired at 49, my only regret is I coundn't leave sooner...life is too short
chasing the buck...by the time you catch it,you are too old to enjoy your
life....I wish everyone luck in their retirement....
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 > Retirement
Similar Threads
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