Hence the wisdom of investing in index funds, with a low-cost provider like Vanguard etc. Unfortunately, when investing for retirement, this is the only game in town. Put in your money and forget about it.Originally Posted by Mike Henderson
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Hence the wisdom of investing in index funds, with a low-cost provider like Vanguard etc. Unfortunately, when investing for retirement, this is the only game in town. Put in your money and forget about it.
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For the majority of the time I was contributing to my employer's 401K over 21 years prior to my retirement, the money went into a "target year" fund where the mixture changed over time from aggressive to less aggressive. No muss, no fuss, and that decision paid off very nicely as I was able to retire comfortably at age 60. I'm using similar funds for my IRAs that the 401K was rolled over into upon retirement, albeit more conservative than prior to retirement for most of the money. I like to keep things simple.
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The most expensive tool is the one you buy "cheaply" and often...
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That's the ticket alright.For the majority of the time I was contributing to my employer's 401K over 21 years prior to my retirement, the money went into a "target year" fund where the mixture changed over time from aggressive to less aggressive. No muss, no fuss, and that decision paid off very nicely as I was able to retire comfortably at age 60. I'm using similar funds for my IRAs that the 401K was rolled over into upon retirement, albeit more conservative than prior to retirement for most of the money. I like to keep things simple.
Contributor
The comments here got me so concerned, I sold some of my stocks in my 401K today. Well, actually, I just made a partial withdrawal to cover some redecorating expense we are incurring right now.
I have a 60/40 ratio in stocks and bonds. I am in for the long haul.
Last edited by Ken Fitzgerald; 01-13-2020 at 10:52 PM.
Ken
So much to learn, so little time.....
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The trick to succeeding in the stock market is to completely ignore it once you're in. The people who withdrew investments during the 2007-9 downturn were the people who really got hurt. The rest of us did just fine. FUD is your enemy. Ignore the talking heads, wherever they may appear (the media, paid advisers, etc.)
And no, this is not "just my opinion". Assuming index funds, not "fashion candy".
Contributor
For many it is a choice of eating, paying rent, paying for health care, or investing in the stock market. For lower earners, there hasn't been this wonderful rise in wealth. They are working two or three jobs just to survive. In 1979 -1980, I bought some land and built two houses. Only ever had a mortgage on one. Paid it off 5 years early (ten years instead of fifteen.) Paid $54K for both pieces of land, and first house. Today they are worth on close of a million. Land that in 1979 was selling for $2000 and acre, now goes for over $110K an acre. Put some money in a mutual fund, and after ten years (before 2008) had only lost $54. Wish I had bought more land, instead of mutual fund.
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To my mind, the situation is even worse for those just getting by. Even if they manage to put some money into an IRA or a 401K, often some life event comes along and they make a reasonable choice to take the tax penalty and use the money for that event - they just don't have any other assets to fall back on. So they wind up too old to work (or to get hired) and the only thing they have to fall back on is Social Security.
With Social Security or a company provided pension, they can't get access to the money. That's bad for the life event but the people have some retirement assets.
Mike
[By life event I mean something like medical expenses for a sick child or paying for life while the breadwinner recovers from an accident. There are many reasons.]
Last edited by Mike Henderson; 01-13-2020 at 10:17 PM.
Go into the world and do well. But more importantly, go into the world and do good.
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Doug,
I have been in a 401K since 1978. My wife is great about living within a budget. So, after getting out of the Navy after 8 years, when my first employer offered 401K with matching funds, I managed to convince my wife that we needed to invest to get the matching funds. She didn't find it difficult as I was making over 3 times as much as I did as an E-6 over 8 for pay purposes in the Navy. 10 years later they sold us to another corporation. That corporation had a similar program. I always referred to that 401K as our retirement "play" money. The amount we invested wasn't much but over 32 years, even small amounts add up. After both of us working and retiring, we'd live on our small pensions and use that money to play, do things we couldn't afford to do while we were busy working and raising our 3 kids. I woke up deaf in July 2010. My employer had short term disability insurance on me that covered my salary for 6 months. Luckily, I had been paying a paltry amount for long term disability insurance. Most people who buy that don't (luckily) have an opportunity to collect on it. We retired in February 2011. We have traveled and enjoyed ourselves on my "play" money.
I agree with your advice. Don't listen to the talking heads, don't get nervous and research the companies in whom you invest.
Ken
So much to learn, so little time.....
Contributor
My surprise about contributing to a 457K (public employee version of a 401K) is that it really didn't lower my take home pay by very much.
So far it has only had to be touched for a new roof a few years back.
Is one required to start taking money out at some time?
jtk
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
Member
So I should I take your advice and by doing so pay attention to the internet???
Joking aside, the internet is a great source fo research if you know how to use it.
Last edited by jeff norris 2011; 01-14-2020 at 3:45 PM.
Contributor
I'm not familiar with a 457K but for an IRA or a 401K, yes, you have to start taking withdrawals at age 70.5. There's an equation that tells you how much you have to take each year, but your financial company handing your account will give you the data at the start of the year.
It will take you to a very long life, over 100 before you take all your money out.
If you die and there's still money in the account, your heirs have 10 years to take it all out.
Mike
Go into the world and do well. But more importantly, go into the world and do good.
Member
Remember that as of the !st of this new year the Mandatory withdrawal will be 72 years old not 70.5
Contributor
A fun, if old, read on investing is Bernard Malkiel's book "A Random Walk Down Wall Street". There are those who dispute his theory (including Buffett), but his conclusion (basically, invest in a balanced portfolio of low cost mutual funds on a regular basis over time, no matter what the market is doing) works awfully well for most people as a strategy.
https://en.wikipedia.org/wiki/A_Rand...wn_Wall_Street
Member
do the exact opposite of any recommendation made by Paul Krugman.
Kind of hard to predict prices, but you can kind of predict dividends...
Vortex! What Vortex?
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I gave up on trying and caring. Wells Fargo Advisors worries about my investments now. I spend my time in the shop and traveling.
Michael Dilday
Suffolk, Va.
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