retiring

[ericm979]

Even "good" 401ks have excessive management fees (both stated and hidden) in addition to any fees charged by the investment funds themselves.
When I leave a company I roll that 401k over into a pre-tax account that I manage myself.

 

[RickB]

It took me far too long to figure out the only way around front end sales loads in my employer sponsored SIMPLE IRA was to invest in money market funds and sweep everything into my traditional IRA held at Schwab a couple times per year where I had better options. I left enough in the SIMPLE IRA to avoid annual fees.

 

[KennyG]

Even "good" 401ks have excessive management fees (both stated and hidden) in addition to any fees charged by the investment funds themselves.
When I leave a company I roll that 401k over into a pre-tax account that I manage myself.

It all depends on the company. Where I worked the 401K was run through Fidelity (although we could buy into about 200 funds, many of which were with other firms). The Fidelity fees for the funds were considerably lower than I could get on the same funds because of the huge volume we had as a company. The internal administrative costs were absorbed as an employee benefit. The entire program was directed by an employee committee. I've kept the money in the company 401K after retirement because I get lower fees than I would if I rolled it over.

 

[shooterdon]

I was released when I was 61...retired now for 7 years.

First thing is to talk to your financial advisor. If you do not have one, you probably do not have the resources to retire.

I had to cut down on my standard of living but it has not been a hardship at all. But I had no debt when I retired and that helps a lot.

We eat at home more and shop the sales.

My blood pressure dropped significantly and after 6 months was off my medication.

 

[RickB]

First thing is to talk to your financial advisor. If you do not have one, you probably do not have the resources to retire.

If you read through this thread you would realize how incorrect that statement is.

 

[MossRoad]

It all depends on the company. Where I worked the 401K was run through Fidelity (although we could buy into about 200 funds, many of which were with other firms). The Fidelity fees for the funds were considerably lower than I could get on the same funds because of the huge volume we had as a company. The internal administrative costs were absorbed as an employee benefit. The entire program was directed by an employee committee. I've kept the money in the company 401K after retirement because I get lower fees than I would if I rolled it over.

Me, too. My old employer used Fidelity for the 401K and paid the administrative costs. When they forced me out and retired me within months I would have had to pay the administrative fees myself if I left it with them. I rolled it over into my new employer's 401K, which was also managed by Fidelity. They have an annual fee of about $35 though my new employer.

 

[kenmac]

If you read through this thread you would realize how incorrect that statement is.

yep, If you're savvy enough to manage your own funds great. I have been using an advisor for about 25 yrs to manage my accounts.
He also has no issue giving my sons advise at no charge to them, even though they aren't with him at this time.
If I have a question, I can call him at anytime, day,or night. He owns the company he doesn't work for one of the many companies out there.
I have been happy with his services, and as I have stated, he charges me less than some here have published

 

[buckeyefarmer]

I got something from vanguard today in the mail.

I kept my last 401k in company fidelity account. Current is with principal

 

[Chris616]

I was released when I was 61...retired now for 7 years.

First thing is to talk to your financial advisor. If you do not have one, you probably do not have the resources to retire.

<snip>

As Rick writes, that is incorrect. Turning this around, anyone older than about age 55 should always have a fairly good idea of their financial ability to retire. If you don't, your financial advisor (and that may be you) isn't doing their job. If you don't know how close you are to accumulating what you need, you have no idea how appropriately risky your investments are. For example, if you're 55 and know that you have enough money to comfortably retire, but continue working for your employer sourced health insurance (in the US), you also know that your investments can be in low risk, probably low return stuff.

Chris

 

[buckeyefarmer]

My fidelity is mostly in a fixed income fund. Probably not aggressive enough.

 

[MossRoad]

My fidelity is mostly in a fixed income fund. Probably not aggressive enough.

I put my 401k in the most aggressive funds that were available to us at my employer through Fidelity from day 1. Always put 15% of my pay into it. From late 80's to present. I'd check them about every 6 months and make adjustments but pretty much stayed the course. Even in 2008, when I lost 30% of my net worth, I kept them in the funds, didn't transfer them out, kept putting 15% into it which bought way more shares at the lower prices, and stayed the course. By 2010 I was back to my original 2008 net worth, and but 2012 my net worth doubled. Looking back, 2008-2012 was the best thing that ever happened to us financially. Kinda weird.

Losing 30% of your net worth makes you want to jump off the local parking garage. However, pretty much everyone was in the same boat, all the financial advisors recommended staying the course, we stomached it out, and ended up OK. I've remained in highly aggressive funds ever since. My wife is in some aggressive funds as well, but she also has a few that are the ones that are targeted towards her retirement age, gradually getting less aggressive each year as she gets closer to retirement.

I am starting to think about moving towards those types of funds as I get near retirement as well... in about 8 years. :laughing:

 

[RickB]

I did the same thing in 2008-2012. Left my contributions the same, never sold a position. I will admit I did not check my balances very often there for quite a while! The ones that suffered losses are the faint hearted and those that did not have their immediate needs in cash or fixed income securities. The latter scenario is one to be avoided.

 

[MossRoad]

I did the same thing in 2008-2012. Left my contributions the same, never sold a position. I will admit I did not check my balances very often there for quite a while! The ones that suffered losses are the faint hearted and those that did not have their immediate needs in cash or fixed income securities. The latter scenario is one to be avoided.

Yes. I felt bad for anyone that needed their money right after it tanked. They'd have to sell at the losses.

Speaking of that, I know a guy (we all know a guy) who's wife filed for divorce right before the time of the 2008 crash. This genius was responsible for all the finances. He hid them all from his wife. And he refused to provide the court with the records. The court appointed a forensic accountant to find the money. There was about $2M in assets, BEFORE the crash, when she filed for divorce. Because he hid it during the crash, it lost about 30% of its value, so $600K!!! The court ordered him to pay her the value at the time of divorce, not what it was worth after the crash. So he had to cough $1M for her and only got $400K left. :confused2:

YIKES!!!

 

[goeduck]

I did not bat an eye at the downturn in 2008. Downturn is good to weed out the poor performing stocks. I think mine dipped 10% or so and I was in a fairly aggressive position. I was the financial power of attorney at the time for my MIL and she lost 5% in a less aggressive position. I always like to see drops in the market so we see the floor.

 

[bird dogger]

During my working career the vast majority of my 401K funds and contributions went into RSEGX (Victory RS Small Cap Growth fund). I watched the funds value explode in the dot-com bubble (1990s?) and collapse at the end of it. But still kept my contributions going into it at the lower and lower prices. The same during the 2008-20012 bubble. By the time I retired in 2015 (March) those funds had more than recovered and the contributions at the lower values had appreciated enough to give a very good return compared to the other options available in our company's 401k plan. A few people made the mistake to jump out of the fund after it had fallen considerably and lost all their gains they had made in their 401k. We couldn't convince them they had more than enough time to recover before they reached their retirement age as they were much younger than the few of us that stayed in. I'd rather not go through that again now at this age though. I still try to keep ready reserve funds that would easily last a couple of years now that social security has come into play. "Time" is definitely your friend during a down market! People always say they're losing money in the down market and I try to convince them that they'll only lose it if they sell their shares when the price is down. That's what your reserve funds are for....to buy you that market recovery time.

I thought about this thread while working outside today and later went through every post. It's quite a read and a wealth of collective wisdom. There is essentially a crash course in investing right within this thread....and a mighty good one at that. I've learned from it, so a sincere thanks to all who've posted their views!! My parents grew up through the depression years so the talk of investing in the stock market was never a topic. I really didn't know of it til after college and starting my career. There, fellow co workers got me involved and interested in investing. We made some good moves and we certainly made some bad ones that we chalked up to education. I can't imagine if the internet (or ease of its use) and this thread had been available for its guidance how much better off we would've been. Hopefully it'll be enough to get the younger readers here thinking about their retirement fund and deciding to act and follow the path that best suits them for their future financial independence. Thanks again to all!! Regards, David

 

[Jstpssng]

In 2008 we were much more concerned with keeping our jobs than with performance of a retirement fund. The forest industry was going through some major adjustments and growing pains anyways, the downturn just made the pain worse.

 

[bird dogger]

A much earlier post had questioned about the right time to draw SS payments. I decided to take mine at age 62 and I'm mad because I missed the first payment because I didn't get the paperwork in in time. Oh well. But in deciding, I sat down and crunched numbers for a good afternoon and wound up taking it early because of this: (and correct me if I'm missing something even though its too late to change :laughing I think I used 30 to 35 years as an estimate of my demise.
I really didn't need to take early payments as I had funds to live off of til age 66 1/2. I took the lower value of payments until age 66 and totaled them up and put them in an imaginary account. (4 years worth) Then I totaled the value of the remaining years (+/- 30) at both the lower payments and the higher payments (if I had waited to start drawing at age 66). The difference between those two sums was xxxx dollars. But remember, I had that account of 4 years of payments from age 62 to 66 sitting there, about $75K) If that account's money was invested in the same next 30-35 years it only needed to earn barely more than passbook savings interest to make up the difference of having taken SS at age 62 vs 66. (I think it was between 2-3%) So I figured it was a no brainer for me to leave my money in the market that was easily averaging between 8-12% and use the SS payments to aid in the day to day expenses. Factoring in for inflation really made no appreciable difference as both figures went up the same percent. Plus, if things change, I will have had the use of 4 extra years of that money. With the good market return these last few years I haven't doubted my choice. But there's a lot of smarter people here than I am, for sure. Am I missing something in my thinking? Regards, David

 

[kenmac]

I plan to take my SS in about 5 months at 62. I may not be around to take it at 66.5.
I can take what I get from my SS and have my advisor lower the amount I take from my account.
Sell a few steers once a year and I'll be ok

 

[drssg]

A much earlier post had questioned about the right time to draw SS payments. I decided to take mine at age 62 and I'm mad because I missed the first payment because I didn't get the paperwork in in time. Oh well. But in deciding, I sat down and crunched numbers for a good afternoon and wound up taking it early because of this: (and correct me if I'm missing something even though its too late to change :laughing I think I used 30 to 35 years as an estimate of my demise.
I really didn't need to take early payments as I had funds to live off of til age 66 1/2. I took the lower value of payments until age 66 and totaled them up and put them in an imaginary account. (4 years worth) Then I totaled the value of the remaining years (+/- 30) at both the lower payments and the higher payments (if I had waited to start drawing at age 66). The difference between those two sums was xxxx dollars. But remember, I had that account of 4 years of payments from age 62 to 66 sitting there, about $75K) If that account's money was invested in the same next 30-35 years it only needed to earn barely more than passbook savings interest to make up the difference of having taken SS at age 62 vs 66. (I think it was between 2-3%) So I figured it was a no brainer for me to leave my money in the market that was easily averaging between 8-12% and use the SS payments to aid in the day to day expenses. Factoring in for inflation really made no appreciable difference as both figures went up the same percent. Plus, if things change, I will have had the use of 4 extra years of that money. With the good market return these last few years I haven't doubted my choice. But there's a lot of smarter people here than I am, for sure. Am I missing something in my thinking? Regards, David

I had to read through that a few times, but I'm not seeing anything that you're missing. It seems like the key would be that your spending stays on track, so you really do have the additional $75K accumulating returns. Enjoy!

 

[Chris616]

I don't know the details of how SS works, but there will be some age (80something) where taking a smaller amount at age 62 will be equal to a larger amount at some later age. After 80something, the larger monthly payout becomes the best option, so if David used 30-35 years as his post-retirement planning lifespan, shouldn't taking the larger amount at a later age be the option with the best financial payout? If not, the whole deferring to get a larger payout incentive doesn't work, which I doubt.

Chris