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I understand working later if you have to whether full or part time, I will probably end up in that boat myself. But I think people who continue to work for a paycheck that don't need to ought try staying useful with volunteer work. Not trying to judge, but if people don't move out of the job market that can, doesn't leave much room for young people.
How can boomers quit working if they are only earning 1% interest on retirement investments? You can't live on that. Also, there is the real question if social security will be available for boomers. Even if it is, there is a good chance payments will be cut significantly. Retirement is a pipe dream for many boomers now.
Add all the offshoring and that just makes it that much worse for the next generation.
Absolutely. I wonder if Americans would be willing to pay more for products to at least keep customer service jobs within the USA. If we don't do something as a whole....the job mess will only continue to get worse. Our greed for everything cheaper is really coming back to bite us.
How can boomers quit working if they are only earning 1% interest on retirement investments? You can't live on that.
1. I don't think many expect their portfolio to return 1% going forward over a multi-decade retirement. We're had a bad recession with a weak/slow/choppy recovery, but that doesn't mean there will never be investment gains again.
2. Bonds and gold have done better so a broadly diversified portfolio would have returned better over the past "lost decade" than 1%.
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Also, there is the real question if social security will be available for boomers. Even if it is, there is a good chance payments will be cut significantly.
No, there is no question about whether social security will be available for boomers.
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Retirement is a pipe dream for many boomers now.
Same as before the recession. Few have the means or discipline to prepare adequately.
we actually save each other alot of typing as we both have the same viewpoint most of the time.
yep, folks plan badley, invest badley and then blame markets.
they forget the fact other asset classes and investments did great.
my gold was up 400% over the decade, mid-cap stocks up 50% , i saw a return on average of 17% a year for 7 years from my un-traded reits..
bonds did great..
its not about hindsite, its about getting to the party before asset classes are in favor and then holding them forever and letting them cycle over decades rebalancing every year.
folks only want to buy what already went up, or they 2nd guess the markets and try to predict the next bubble and shy away or they just plain think they are so smart they will sell soon as things drop and rebuy before the rise.
Boomers are nearing retirement. There is, or should be, a big difference between investing for future retirement, investing close to retirement, and investments in retirement. Risking investment principal is not advised within a few years of retirement or in retirement (as many found out by losing substantial downpayments by buying expensive houses in the housing bubble). Some boomers who have invested well and saved for retirement face much uncertainty.
Interest rates are very low and not likely to increase for many, many years. 10 year treasuries are paying around 2.5% and since there is a very good chance of inflation going forward not a good yield for a retirement investment. The FED has to keep rates low or treasury debt issued will explode in order to cover interest expense further compounding the deficit.
Social security may not be available. The government is issuing $1 of debt for every tax dollar received; 1/4 of total government debt is sold to foreign investors. Leaving the risk of funding 25% of US programs by foreign investors aside, the US deficit is a huge problem. The government can't kick the can down the road much longer. Politicians have two options to reduce deficits: cut programs and/or raise taxes. Of course the US goverment could also default, but lets not go there. While I agree SS will be around for some Boomers realistically it may not be around for others. I think means testing will eventually truncate some Boomers, who were counting on SS as a supplement to investment income, because they will be too "rich"
There is a good chance of significant tax changes going forward. There has been recent talk of taxing certain investment income as ordinary income and increasing capital gains taxes. Both tax implications would hit retirees' income hard.
Low interest rates, likely changes in SS and taxes are real issues for Boomers: even the fiscally responsible ones. Boomers may be working a long time before retirement.
Last edited by texan2yankee; 08-28-2010 at 08:03 AM..
Reason: correct typo
as far as age vs investment style age isnt as much a factor as is risk tolerance regardless of age , and how long of a time frame on the money.
age is the least important ... even at 62 you still have money thats very long term money and wont be used to eat for 30 years or more.
depending on the amount of withdrawls you need from that income there is no reason that long term money shouldnt be in diversified mutual funds.
you wouldnt put short term money or even intermediate term money in stock funds but the long term is just fine.
a 20 year old who hasnt the stomach to do the right thing when markets fall and panics everytime and looses money shouldnt be at the risk level he is regardless of what the formulas say for his age. . a 62 year old who takes his long term money and puts it in diversified funds to ride out the next 30years and can sleep at night thru the drops is fine.
the more other income a retiree has the more long term money for investment they may have too.
the point is its not about age as much as the other factors... a total market index fund will be totally ahead when that money is used to eat in 30 years or so.
Last edited by mathjak107; 08-28-2010 at 08:02 AM..
Typo, sorry, I will change that in my post. Actually the yield for the 30 was 3.5% as of yesterday.
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