Retirement savings ....Yikes !

[daugen]

just change most to many people and this makes more sense. As a retired financial planner, who has slogged through the financial affairs of many
clients, some quite poor, I can tell you that one is either a saver or not. I think it has to be drummed into you from your parents. Savings aren't optional,
they are required. Just like the squirrels, we have to put some nuts away for the winter or we will get very hungry. Literally. 5 pound blocks of cheese from the local
food pantry get old quickly. And I know people who have tried to get by on that cheese.

Uncle Levi, yes, yes, yes, we should be careful who we judge. Life can throw serious curveballs at all of us.

 

[Travelover]

I'm glad you said " most people". My wife Jo and I have done without toys, vacations and most other things to try to save for retirement. She's 60 and I'm 64 and we were in pretty good shape, but now she's on a heart/kidney transplant list and we've wiped out almost everything keeping her alive the past year and I fear the worst medical expense is yet to come. Please be careful who you judge.

I'm so sorry that you have had to endure this. Many of us are just one illness away from being in the same situation, in spite of a lifetime of savings and thrift.

 

[cdaigle430]

I'm glad you said " most people". My wife Jo and I have done without toys, vacations and most other things to try to save for retirement. She's 60 and I'm 64 and we were in pretty good shape, but now she's on a heart/kidney transplant list and we've wiped out almost everything keeping her alive the past year and I fear the worst medical expense is yet to come. Please be careful who you judge.

Very sorry to hear about your situation, its very tragic and I wish you and your wife the best. Most of us think of retirement savings in terms of how much we are going to be able to spend when we retire. Most of us also forget one very important thing about getting older and retirement and thats our health.

I think if we were to change the way we think about retirement and work towards two very important things like paying off the home and making sure we have\afford medical insurance for the rest of our lives then we would be in the best position possible to live out the rest of our lives comfortably.

Our lifestyles change (for the most part) when we get older so we dont need as many toys but travel more.


Prepping for retirement in order I think we should;

1) Health
2) Medical Insurance
3) No debt
4) House paid off
5) Travel Funds
6) Children


As for me practicing what I preach I am in my 40s and so far have;

1) Small pension
2) National Guard Retirement
a) Includes full health and dental at age 60
3) Disablility
a) Includes full health and dental now
4) over 100k in 401k and growing
5) Old age home for veterans-if needed
6) Funeral expenses
7) Working on paying of home by 60
8) Working on paying of debt by age 50
9) Social Security

However;
I have a disablity that may prevent me from working after age 55 so I am limited in what I can save. I am working on ideas for not only saving up more for retirement but also more importantly-living comfortably today. I dont trust the government and the stock market so most of what I have is volitile and I want to prepare for that as well.


Any ideas?

 

[schoolsout]

I'm not sure how accurate your characterization of events in Cyprus is daugen.

Several Cypriot banks are insolvent and the EU has offered a bailout with terms that require some depositors to take a hair cut on their accounts.

I'm not a banker but my understanding of it is is when a depositor deposits cash into a bank account, the asset becomes the asset of the bank. Deposits are what the bank uses to make loans. If the bank, by whatever means becomes insolvent then depositors are essentially creditors in a bankruptcy.

I don't recall so many of us expressing support for bank bailouts. Am I missing something?

Depositors are last in line for any sort of "haircut" or loss.

What I've read is saying that doing what they did, the ECB/anyone else that bought bonds in the Cypriot banking system didn't lose anything. It's similar to what happened with GM here...

 

[schoolsout]

my understanding was that "local" and/or smaller than $100K accounts would not be affected. So if my facts are off, please
correct me. I'm not sure they know right now yet.
I honestly think they see this as a way to tap into the Russian money they've been hiding/investing,
and like Robin Hood, rob from the very, very rich. Perhaps all a fairy tale. But take ten billion from a depositor who has thirty
billion with you, and guess where he's going to spend the next dollar? Like the anarchy in Mexico where a judge has a very short life
expectancy, truly annoy the very wealthy and they are capable of paying for the Guido's and Boom Booms of this world, or their more modern
operational brothers in Central America, to express their displeasure. with prejudice. So if I were a Cypriot bureaucrat signing these orders, I might
think of taking a long vacation.

What is at stake here is the seizure of what I thought were "ill begotten gains". If anything else, this is just robbing the nearest deep pocket.
And robbers should be repulsed...

They planned to give everyone a haircut until they realized exactly what would happen. Our "banking" system depends on trust and nothing more. It is actually a ponzi style scheme when you break it all down. It is doomed to fail from the very start, but is only held together by confidence. People are starting to lose confidence....

It is now known that most of the big money (Russian/whomever) was able to get out before hand so the theory of getting "ill-gotten" gains doesn't hold as much water as it once did...

Banks have been closed and accounts frozen in Cyprus recently. Nevertheless, large amounts were moved out of the country's crippled financial institutions on the eve of the bailout package. Lawmakers are suspicious and are investigating both the government and the Cypriot central bank.

Cypriot Parliament Investigates Government after Dubious Transactions - SPIEGEL ONLINE

Most of all, though, the central bank head has been harshly criticized due to the suspicious capital flight from Laiki and the Bank of Cyprus, the two institutions that have been hit hardest by the Cypriot banking crisis. There are indications that large sums flowed out of the two banks just before the first bailout package was signed in the early morning hours of March 16. At the end of January, some 40 percent of all savings held in Cypriot accounts were on the books of those two banks. Since then, however, much of it has been transferred elsewhere, despite orders from the central bank that accounts at the two institutions be frozen.

Also, much speculation that this move by the Troika is to spur money velocity. Either way, they are playing with fire.

 

[schoolsout]

My sense of it is that some of this was brought on by their own (Cypriot) banking regulations for which those large depositors were very much the beneficiaries. Perhaps also mixed in with this is this unquestioned notion that free capital flows are always a good thing. In fact some would suggest that much of the reason for our own banking system meltdown involved large inflows from China and the oil producing states.

So how far should EU protection be extended in this case? And what would those depositor accounts look like absent a bailout?

This is a very complicated situation.

Remember the ECB stress tests? The ECB said these banks were fine. This is much of the problem. They lied covering up the problems in the banking system (the rot runs deep here, too....make no mistake about it) and that enticed bond buyers to buy the garbage (ECB and Germany bought them, too, to help sell the story they were fine). Problem is, they weren't fine. ECB and other EU banks don't want to lose money on this so they are forcing depositors to help them out.

This whole thing is similar to the ratings agencies rating mortgage backed garbage as AAA...it's all a fraud. The ECB and other higher-ups should answer to this. Problem is...they won't. They will just take.

 

[schoolsout]

Some people may be writing this Cyprus thing off as finally taxing shady money. Other people see this as a precedent and are talking about doing the same thing in other EU countries. Maybe it's a stepping stone. Do it to the criminals and let the general populace morally accept it that way, then it's less of a jump to do it to the non-criminals. And yea, anyone that's signing off on giving big crime (if thats what it is) a big haircut better have some big time security.

Keith

not just in Europe...it is coming to a bank near you...in one form or another.

The official 2013 Canadian budget contains an explicit provision that Canada will pursue the bail-in model for systemically important banks for future bank failures!

Titled ECONOMIC ACTION PLAN 2013


From Plan 2013 Page 144: (pg 154 of pdf)

典he Government also recognizes the need to manage the risks associated with systemically important banks葉hose banks whose distress or failure could cause a disruption to the financial system and, in turn, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable.


From Plan 2013 Page 145: (pg 155 of pdf)

The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital.


This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants


This risk management framework will limit the unfair advantage that could be gained by Canada痴 systemically important banks through the mistaken belief by investors and other market participants that these institutions are 鍍oo big to fail".


Click here to read the full report

http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf

 

[Gale Hawkins]

This entire world financial issue has evolved well beyond my understanding of the facts. Hopefully that is not the case for those behind the wheel.

Trucks Carry Cash For Cypriot Banks - Business Insider

Cyprus Banks Finally Reopen But Anger Lingers
If what the people are stating is factual I just hope Cyprus types of issues do not find their way here.

FABER: Gold Won't Be A Place To Hide - Business Insider

 

[Brokermike]

Buy no load mutual funds from a low cost source like Vanguard, Fidelity or T Rowe Price. If you buy index funds as opposed to a managed fund your costs will be lower and results about the same - maybe better.

For bonds, you can use tax exempt municipal bonds, though they generally pay a little lower rate. Stock long term gains and dividends are taxed at maximum 15%. less in lower tax brackets. See link.

No Capital Gains Taxes Due For Some Investors | Bankrate.com

Just remember that you generally get the advice you pay for.

What percentage of the S&P was financial stocks in 2007 versus 2009?

Re: Bond Funds. Why would you want to own a bond fund that invests in companies with the most debt versus companies that have the greatest ability to service their debt.

Sometimes management is worth the price you pay

 

[Travelover]

Just remember that you generally get the advice you pay for.

What percentage of the S&P was financial stocks in 2007 versus 2009?

Re: Bond Funds. Why would you want to own a bond fund that invests in companies with the most debt versus companies that have the greatest ability to service their debt.

Sometimes management is worth the price you pay

Well Broker Mike, if my livelihood depended on keeping that misconception going, I'd say the same thing.

By the way, I was financially independent at age 45 and retired at age 54.