Retirement

[Ken]

Way to go Ken. I wish you and your wife many years to come. Framer

Best thing I ever did was to tell Edward J. and T. Rowe to return my funds that I had put in for years and received letters how well it was doing Only the bottom line stayed the same
For years also used a Credit Union it one of the best ideas I had used. Every thing a bank can do and gives interest also.
I have been busier after retirement than while working. but it is my choice what and when to work. Mostly now planning month long trips to See the U.S. and living in different rv. parks.
ken

 

[ultrarunner]

Ultra runner, you should look into an annuity. your return looks like just a savings account, you can go broke that way? they will treat you right and even furnish figures for your returns.

The work plan is limited to 8 funds... all were hit hard.

I got so disgusted with the 2% average mgmt fees that I stopped all contributions... used to do the max to get company match which hasn't existed for a couple of years now.

 

[Travelover]

Ultra runner, you should look into an annutity. your return looks like just a savings account, you can go broke that way? they will treat you right and even furnish figures for your returns.

While an annuity can be appropriate for some people, many have excessive fees. Research them very carefully. Right now with interest rates so low, the payout on a fixed annuity is poor. If you lock into that for life, you'll be stuck with that payout forever.

Annuities Offer Steady Income, Big Drawbacks - BusinessWeek

 

[beppington]

The work plan is limited to 8 funds... all were hit hard.

I got so disgusted with the 2% average mgmt fees that I stopped all contributions... used to do the max to get company match which hasn't existed for a couple of years now.

Vanguard's index funds have very low expenses :thumbsup: Some examples:

VIVAX (Vanguard Value Index fund) 0.26%
VFINX (Vanguard 500 Index Investor fund) 0.18%
VBISX (Vanguard Short-Term Bond Index fund) 0.22%
VTRIX (Vanguard International Value fund) 0.45%
VEIEX (Vanguard Emerging Mkts Stock fund) 0.40%

 

[johnk]

One thing I like to point out to folks considering retirement is that a million bucks in the bank yielding 2% is only 20K per year. You need to keep investing some of your money in higher risk investments that yield higher returns. You may live to be 100. :thumbsup:

If you have 1M in retirement funds you probably have a pension and SS so who cares about 2% earnings which is definitely on the real low end. I'd look for a new advisor....

 

[MossRoad]

I remember the endless parade of 401k people presenting at work... they always had colorful charts or power point presentations...

The return always bantered about was 10% and the charts and graphs used 8% to be "Conservative"

My 5 year rate of return is 2/10ths of one percent.

While our last three years rate of return is miserable, my 23 year rate of return is right around 20%. A 401K is for the long haul and you have to be able to weather the ups and downs.

 

[johnk]

While our last three years rate of return is miserable, my 23 year rate of return is right around 20%. A 401K is for the long haul and you have to be able to weather the ups and downs.

I'd like to see the facts of your 20% return. Sure things compound and with the ups and downs in the market I find it hard to believe you made 20% in 23 yrs. If thats what you made God bless you. If you can get a steady 6 to 7 percent after you retire with a little less risky funds open the blinds, peek out, and if it looks real cold or snowing. close them babies back up and crawl under the blankets..

 

[MossRoad]

If you have 1M in retirement funds you probably have a pension and SS so who cares about 2% earnings which is definitely on the real low end. I'd look for a new advisor....

The point I'm trying to make is that there are many people that think a million dollars is a lot of money and enough to retire on AND don't realize that putting that much money in a low return like a bank savings account won't provide them with enough interest income to live the life they are accustomed to living. They end up dipping into the savings to make up for the shortcomings in earnings. By dipping into the savings each year, they reduce the amount of money they can earn interest on, so the next year they have to dip out more.

A lot of people do not take that into account.

As far as social security and pensions go.... I am not counting on social security being there when I retire. Very few companies offer a pension any more. That's why a wide and broad range of investments of varying risks, more risky when you are young moving towards less risky when you are old, started when you are very young and continued until the day you die is the best way to go.

 

[MossRoad]

I'd like to see the facts of your 20% return. Sure things compound and with the ups and downs in the market I find it hard to believe you made 20% in 23 yrs. If thats what you made God bless you. If you can get a steady 6 to 7 percent after you retire with a little less risky funds open the blinds, peek out, and if it looks real cold or snowing. close them babies back up and crawl under the blankets..

Some years I averaged 35% returns and some years I averaged 10%. Three years ago we lost a huge chunk of value, just like a lot of folks. It took about 2.5 years to get it back. I think what did it for us was fighting the urge to pull everything out when things started tanking and sticking with our plan. We kept putting money into our investments when they were tanking, which allowed us to buy more shares at lower prices. When those prices came back up, we had lots of shares. A lot if people pulled their money out at or near the bottom and didn't put it back soon enough. You can't time the market, as the old saying goes. Come up with a plan, stick to it, evaluate it every year and adjust as necessary.

 

[timswi]

Some years I averaged 35% returns and some years I averaged 10%. Three years ago we lost a huge chunk of value, just like a lot of folks. It took about 2.5 years to get it back. I think what did it for us was fighting the urge to pull everything out when things started tanking and sticking with our plan. We kept putting money into our investments when they were tanking, which allowed us to buy more shares at lower prices. When those prices came back up, we had lots of shares. A lot if people pulled their money out at or near the bottom and didn't put it back soon enough. You can't time the market, as the old saying goes. Come up with a plan, stick to it, evaluate it every year and adjust as necessary.

That's exactly what I did Moss...have about 22 years to retirement, but have been putting 12% of my income away since age 23. Aside from the mess over the last couple of years (which I've recovered and then some) the more in the investment account, the faster it grows...Kinda fun to watch now, most of the time anyway.

2% would be a CD type investment...Those haven't paid much of anything since the 80's. Good bond funds with a mix of blue chips works pretty good close to retirement..that's what my mom has and she's getting ready to hang it up any day now. Based on the calculations and the returns, she can easily pull 4% out of the fund and have no money issues.