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Retirement with 401k


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Tiger MT's Carter
What a great day for me. I had started the process to roll my for 401K into an IRA so all of that money was setting in cash yesterday and today. How is that for luck??
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Gunflint Charlie

Wow, that's a nice timing break! When I did that a few years ago, I missed a market bump almost as big as today's drop. Luck of the draw for sure.

Jay

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Dave Medema

We used to have a brochure entitled "Louie the loser".  He bought stock on the absolute worst day (highest price of the DJIA) every year and sold it on the worst day of the year 29 years later (lowest DJIA) - the year before he was to retire.  He still averaged over 8% on his money and did just fine.  The purpose of that brochure was simply to show that getting in the game is much more important than timing your buys and sells.  

Take advantage of any help from your employer.  Take advantage of any tax advantaged products.  Get in the game.  Be patient.  If you start early enough, time is on your side.

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Tiger MT's Carter
One day does not mean a hill of beans in a lifetime

No doubt, but not being in the market yesterday saved me about $20,000.

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Take advantage of any help from your employer.  

Take advantage of any tax advantaged products.  

Get in the game.  

Be patient.  If you start early enough, time is on your side.

If they ever write the Ten Commandments of Retirement Investing, those should be the first four.

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One day does not mean a hill of beans in a lifetime

No doubt, but not being in the market yesterday saved me about $20,000.

And investing when the market is down can make you $20,000. Sounds easy, doesn't it?

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One day does not mean a hill of beans in a lifetime

No doubt, but not being in the market yesterday saved me about $20,000.

no doubt and not being in the market the last couple of years cost you alot more than that.

the point is no one knows when bulls and bears run.  but the bulls run faster and longer over the long run than the bears.

there is a very true adage.

its time in the market not timing the market

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Tiger MT's Carter
One day does not mean a hill of beans in a lifetime

No doubt, but not being in the market yesterday saved me about $20,000.

no doubt and not being in the market the last couple of years cost you alot more than that.

the point is no one knows when bulls and bears run.  but the bulls run faster and longer over the long run than the bears.

there is a very true adage.

its time in the market not timing the market

I have been 80-90% in equities since 1990, I get it.

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I've concluded that market timers and stock pickers make a lot more money for the broker than for themselves.

I find some low-cost funds and let it ride, and dump as many pennies in as i can stand.  I've had some -4% years, but they're more than offset by the occasional +30% years.

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bennelli-banger
that is the beauty of 401k plans...we just let it happen, no decisions...and thus, we get the benefit of down markets every time our $ gets added during that downturn...if we had to make a decision every two weeks, I suspect some crazy thoughts would take over in many cases and nothing would happen...or, the buying would tend to occur at market levels  that are moderate to high, and "paralysis by analysis" would take over during the rough times, and nothing would be done...
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I worked hard and fully funded my own retirement, as well as my kids college funds, every year. I turned 62 this year, and looking back, this was the smartest thing I have ever done.

Looking at the retirement issue in a simple form, you can count on $4000 per month for every million you have in your retirement fund without hurting the principle.

For commercial real estate investments, it will take you about $700,000 to $800,000 to generate the same $4000 per month.

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Another fascinating topic.

John Bogle is my hero. With absolutely no training or education in fiance I happened to be reading an article in the waiting room of my dentist's office in '84. Money Magazine was profiling an interview with John Bogle. We had just sold an asset and had the money parked in a MM fund at 15%. As that rate began to decline we began to move the principal to the S&P 500 MF and eventually into the Total Stock Market MF in IRAs. My theory is that if the market goes totally keplunk it isn't going to matter where you had your money. FDIC isn't going to help. Cost averaging would have been better than a annual contribution but my business isn't structured that way.

A foolish thing we did from a risk standpoint was that for 15 years in midlife we carried no health insurance. It was a dumb decision in hindsight, but we put the monthly insurance payment in a Health Care MF that turned out very well. It was a hedge against rising health care costs. If I could do that over I would have taken insurance and still made the contribution.

The only "market timing" we have attempted was to borrow money to invest on a few serious dips, which has worked out well, but we never touch the assets of the funds.

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This has been a very interesting read...thanks everyone!

As part of our move from Canada to US in 1997 we divested our Canadian RRSPs and started with new empty  :down: 401K's IRAs, and ROTHs.

Since that time we took every possible employer advantages offered, maxed my 401K contributions (sole earner but you never miss what you don't have/see), since turning 50 added catch up payments, leveraged all contribution opportunities in years were my wife and I were eligible for ROTH IRA contributions, etc.

Despite being out of work twice for extended periods (having that 6 months cash net helped big time), 9 and 6 months, we are doing OK and seeing the benefits of dollar averaging contributions (especially during the 08-09 downturn when I worked for a company that also offered stock contributions as part of a pension plan for all employees...18 months of stock at sub $20 that is now at $70 turned out to be very helpful).

We resisted all temptations to access these funds when changing companies (always rolling into IRA) even when I was unemployed and living VERY lean with no family help.

Our discipline over the next 15 years will help set us up (and hopefully our kids) for a less stressful retirement as we expect no big inheritances and the need to financially support one of our kids given their long term personal situation.

I can honestly say we have not gone without doing this, it was worth it, and we even found a way to be relatively debt free by refinancing our mortgage to a shorter term when the rates dropped enough to warrant.

No one knows what the future holds but thinking long term in holdings, dollar averaging investments, etc. Has started to pay off especially when we consider that their may be no government assistance available to retirees in 15 years or so...plus I may even be able to consider changing the type of work I will do 5 - 6 years from now that will free up significant free time for travel, hunting, fishing, etc.

So for you youngins..start now with whatever you can in regular routine contributions, take every advantage offered, and live within your means!

Good luck!

J4B

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One thing that I tell the youngsters who are still wet behind the ears:

Save as much as can as aggressively as you can to build up principal because once you hit the $100K, $500K and then $1mill marks you really get a chance to see how money can work for you.  Forget the new stereo, rims, etc.. get your finances in order and the rest comes easier.

A mentor of mine also stated, once your money starts making you more than what you can save consistently, you are on a good course as long as you stay disciplined.

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