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Tiger MT's Carter

Retirement Savings?

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bennelli-banger
A lot of paranoia here.  Yes, the pols will mess with SS...they will take more than 6.2% out of your paycheck and more than the same amount from your employer; they will keep pushing back your full retirement age (which they should, we are living longer); they will tax all of your SS (right now the amount taxed ranges from 0% to 85%, depending on income); they will reduce benefits perhaps...but, they will NOT do away with it.  Trust me on that.  The bastards want to win re-elections.  IRA's and 401k's?  All they can aspire to do is tax it...if you are NOT saving in vehicles like these, or 529 college savings plans, because you are sure that the govt is going to raid it, I think you are making a mistake.  People fret about municipal bonds losing their tax-free status...or, mortgage interest not being deductible any longer...etc, etc, etc.  The LAST things that will be tinkered with are the things that AVERAGE people have or are covered by...SS, Medicare, IRA's, 401k's, etc, would cause a mass uprising if they were materially messed with.  The govt is keenly aware that pensions are a thing of the past, and that people need incentives to save.  Again, the people who vote, who have the power to elect, are the people who have a vested interest in these programs...the pols know this.  Maybe I am wrong...when my IRA and/or 401k administrator informs me that I am no longer able to access or withdraw my $, then I will make sure I do it ASAP.  But that won't happen...unless we are overthrown by ISIS...or Canada.   If you are convinced that your accounts are going to be raided at least save using a bank account, standard brokerage account, or buy real estate and pay it off quickly, or best yet, buy yourself an ounce of gold every time you come up with about 1200 bucks...a veritable bargain from just a few years ago when it was worth over 1800 bucks...we must be a 1/3 better off today since that is how much gold has cratered in just 2-3 years....

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bobman

I disagree, its not paranoia get the right combination of people in office and they will do it ...

and use the excuses  like its unfair that some have more than others

or

it will save SS or whatever and there are a ton of uninformed indoctrinated people that will buy into that argument so they will have nothing to fear.

One only has to look at the trajectory this country has been on for the last 20 years so see this coming.

IF I was in my 20s or thirties today I would be investing in hard assets like rental properties

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bennelli-banger
I disagree, its not paranoia get the right combination of people in office and they will do it ...

and use the excuses  like its unfair that some have more than others

or

it will save SS or whatever and there are a ton of uninformed indoctrinated people that will buy into that argument so they will have nothing to fear.

One only has to look at the trajectory this country has been on for the last 20 years so see this coming.

IF I was in my 20s or thirties today I would be investing in hard assets like rental properties

Like I said, if you are worried about some of these scenario's, invest in real estate or gold or canned tuna or ammo or whatever...discussions like this are "what make's a market" and are terrific...I am glad that all of us don't think alike.  When everyone on this board agrees that stocks are a great investment and you should load up I will know it is time to get out...but until then, I think the Johnson & Johnson's, the Proctor & Gamble's, the Kraft's, the Altria Group's, the American Electric Power's, the Pepsi Co's, etc, etc, etc, are going to keep doing OK because we will keep brushing our teeth, wiping our butt's, washing our selve's, feeding our selves', medicating our selves', paying the power bill, the phone bill, etc.  But maybe we won't????????

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WyomingArt

For those not-yet-retired, a pretty good money management website geared to eventual retirement and investing  is bogleheads.com.

They lean toward "live-below-your-means" , long term investing in a few broad , low expense ratio index funds, regular contributions, smart buying, using a fee only financial advisor and other mantras many here agree with. There are a few stuffy people there, but most are really friendly to newcomers.

My own bias: CHOOSE YOUR SIGNIFICANT OTHER/DOMESTIC PARTNER/  WIFE WELL. That's as important to retirement sucess as saving, investing, living frugally, and spending smart. It took me two tries, but I got it right the second time.

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Natty Bumpo

The last place I would look to for investment advice would be an internet site.  But I'll throw in my two coppers too, because seemingly everybody else on UJ  has opinions on investments.

1. Somebody wrote that you could expect an "8% return" yearly, over time from the market. Really?? We are in an uber low interest rate environment. Cash (CDs/Treasuries) is paying nothing. Real GDP growth is pathetic. Slowest recovery since WWII. And real earnings growth from equities is increasingly hard to find, except for a few stars like APPL.  Most "earnings growth" from stocks is being gleaned from financial engineering ie. cost cutting, increased efficiencies, mergers, layoffs, moving HQs to Europe, tax windfalls etc; and not from top line increased sales, etc.  Most of the returns from equities is in the form of dividends.

2. The dollar is getting stronger by the day and Mr Market does not like it. And when Janet Yellen sneezes, the stock market runs for cover. Mr Market is at historic valuation highs by many measures. The Fed will raise rates sooner of later, and when they do, look out below. We are long overdue for a healthy 10%+ correction in Mr Market.

Sorry to be so optimistic, rather its what I see in the tea leaves right now. :ghostface:

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bennelli-banger

The last place I would look to for investment advice would be an internet site.  But I'll throw in my two coppers too, because seemingly everybody else on UJ  has opinions on investments.

1. Somebody wrote that you could expect an "8% return" yearly, over time from the market. Really?? We are in an uber low interest rate environment. Cash (CDs/Treasuries) is paying nothing. Real GDP growth is pathetic. Slowest recovery since WWII. And real earnings growth from equities is increasingly hard to find, except for a few stars like APPL.  Most "earnings growth" from stocks is being gleaned from financial engineering ie. cost cutting, increased efficiencies, mergers, layoffs, moving HQs to Europe, tax windfalls etc; and not from top line increased sales, etc.  Most of the returns from equities is in the form of dividends.

2. The dollar is getting stronger by the day and Mr Market does not like it. And when Janet Yellen sneezes, the stock market runs for cover. Mr Market is at historic valuation highs by many measures. The Fed will raise rates sooner of later, and when they do, look out below. We are long overdue for a healthy 10%+ correction in Mr Market.

Sorry to be so optimistic, rather its what I see in the tea leaves right now. :ghostface:

    I said that I would assume 5% over the next few decades from a balanced fund (50/50) mix, but that I wouldn't be shocked if the return was higher or lower.  I did run some computations earlier in the thread showing how much $ you'd need to invest over 30 or 35 years @ 8% annual returns to arrive at 2.5 or 3.8 million dollars...that return would actually be only about 75% of what one actually would have earned over that time...recession, 20% interest rates, crash of '87, Savings and Loan crisis, internet boom and bust,  9/11/01, corporate scandal/fraud of the early 2000's, market crash of 2002-2003, Iraq war, real estate bubble, the great recession of 2008-2009, etc, etc, etc.  Count the market out at your own financial peril...I advise my clients to expect about 2-3 % from bonds over the next decade or so and to expect stocks to do about 7% as a total return...so, a 50/50 mix probably averages about 5%...or more...or less....the fact that we are in an "uber" low interest rate environment is what causes me to be slightly optimistic about equities...trust me, people with $ are not universally happy with earning 1-3% in CD's, govt bonds, muni bonds, etc...they are somewhat open/very open to stocks, esp those that pay dividends of 2-5%...and that buying is what has buoyed the market...maybe that will come to a screeching halt...maybe the economy will strengthen and the fed will have to tighten appreciably and people can get 4-5% in cd's like they could 8 years ago...or, maybe that won't happen, like Japan, where there rates have been near zero for over 20 years...you never know...warren buffet ain't a bad dude to listen to...he would tell you to buy and index fund and forget about watching the day to day crap...if, and only if, you can leave the $ for 5-10 years or longer...hard to argue with him.  

       I have chatted on this site a bit here and there for probably 5-8 years, and I believe I have determined that there are lots of guys here with good bases of knowledge about many different topics, despite that this is an "internet" site...would I run out and demand that my dr. perform this or that procedure because "Old Dutch" from upland journal had it done?  No...might it cause some discussion, or, some research?  sure.

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bennelli-banger
The last place I would look to for investment advice would be an internet site.  But I'll throw in my two coppers too, because seemingly everybody else on UJ  has opinions on investments.

1. Somebody wrote that you could expect an "8% return" yearly, over time from the market. Really?? We are in an uber low interest rate environment. Cash (CDs/Treasuries) is paying nothing. Real GDP growth is pathetic. Slowest recovery since WWII. And real earnings growth from equities is increasingly hard to find, except for a few stars like APPL.  Most "earnings growth" from stocks is being gleaned from financial engineering ie. cost cutting, increased efficiencies, mergers, layoffs, moving HQs to Europe, tax windfalls etc; and not from top line increased sales, etc.  Most of the returns from equities is in the form of dividends.

2. The dollar is getting stronger by the day and Mr Market does not like it. And when Janet Yellen sneezes, the stock market runs for cover. Mr Market is at historic valuation highs by many measures. The Fed will raise rates sooner of later, and when they do, look out below. We are long overdue for a healthy 10%+ correction in Mr Market.

Sorry to be so optimistic, rather its what I see in the tea leaves right now. :ghostface:

I can't wait for a 10% correction...LOTS of $ can't wait for a 10% correction....

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bennelli-banger
so, if you are in your 20's or 30's, hope for a correction...and make sure you are contributing to your retirement plan!  buy low! then, pay down your debts, except your mortgage, unless you are swimming in cash that you don't know what to do with.  then, build up 1-3 or more years worth of your annual expenses...short-term cd's, short-term bond funds, savings account, whatever.  Then, if you are still wondering what to do with extra cash, buy land, real estate, guns, booze, whatever...you have done well...congrats!  But, keep contributing to your 401k, IRA, etc...esp when the market corrects!  Buy low if you can...but, "auto pilot" dollar-cost-averaging of a 401k is a terrific way to enter the market...gradual, consistent, no emotion...

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trust me
2. The dollar is getting stronger by the day and Mr Market does not like it. And when Janet Yellen sneezes, the stock market runs for cover. Mr Market is at historic valuation highs by many measures. The Fed will raise rates sooner of later, and when they do, look out below. We are long overdue for a healthy 10%+ correction in Mr Market.

I don't disagree with any of it.  Look for a rate increase (small one) by end of 2015, followed by more small incremental baby steps.  Market will adjust, some sheep will be sheared.

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ShortTailGuy
We found a place to invest a few yrs. ago.  Not protected by the govt.  It is a private company and my investment in protected by an insurance policy.  It has been paying a steady 8% return for the last 4 yrs and before that it was paying 10% return.  Max investment is $25,000.  I get a check every month.  Not going to make us rich but nice to see that check every month and adds to the bottom line.

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Big Al

Spend less than you make. Invest the difference in whatever you are comfortable with.  After a forty year run you'll have plenty to retire on.

My number one choice for wealth creation is real estate.

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Gunflint Charlie
As noted above, the government can't "raid" 401(k)s, other than to tax that now tax-deferred income. The money saved and it's earnings will be there until you withdraw it. Of course, later is better than sooner, but we gotta pay taxes on it eventually.

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SODAKer
We found a place to invest a few yrs. ago.  Not protected by the govt.  It is a private company and my investment in protected by an insurance policy.  It has been paying a steady 8% return for the last 4 yrs and before that it was paying 10% return.  Max investment is $25,000.  I get a check every month.  Not going to make us rich but nice to see that check every month and adds to the bottom line.

Sounds a bit too good.

Please explain this further or pass along a contact number, PM if so be.

Can you pull your initial investment plus interest at any time without strings attached?

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