Retirement schemes and fables

Discussion in 'Et Cetera, Et Cetera' started by Wyldgusechaz, Mar 17, 2007.

  1. Wyldgusechaz

    Wyldgusechaz New Member

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    This is something I think younger people should ?know and understand about their future. I have posted this on a lot of sites ?that I visit. Hope I can make sense of this for you.

    I just finished with my financial planner and I have about $353000 in retirement monies. 2 words for this *dog shit*. I am middle aged and if this were the only source of my retirement income I would be hurting.

    Some background. ??At one time most retirement plans were *defined benefit* programs. ?This usually meant you worked for a pre set number of years and in the end you got a certain monthly pay based on a set *benefit*. In SoCal, a lot of the aircraft manufacturers offered this to their workers. So if you worked 30 years you may have received 80% of your base pay in retirement, no matter what the investment climate had been prior. ?The beauty was that your retirement future was predictable. You knew what you were getting.

    Today most retirement plans are *defined contribution* plans. IRAs, SEP/IRAs, Simple plans, 401Ks all fall into this type. You put in a certain amount (it can vary year to year, and your employer may match), thus defined CONTRIBUTION. The big deal with these though is there is no promise at all of how much will be there when you retire. Your money is at the vagaries of the investment climate of the times. For example, if you need $50000 a year to retire comfortably, you will likely need $1,200,000 in your 401K invested at a safe 4%. Once retired you can’t risk this money, it needs to be safe hence the low risk low reward of a Tbill rate. Building up $1.2 Million can be very tough.

    I think but do not know that many companies have abandoned their defined benefit plans and now offer only defined contribution plans. I think they have even taken bankruptcies to release themselves from their pension responsibilities. Not fair but that is the reality.

    Unless you work for a growing company, Intel, Apple, Microsoft, Goldman Sachs, that offers big time stock options, counting on your 401k to solve your retirement needs is no certainty. If you are 35 today and don’t have $75K-100K in funds TODAY, your odds of having enough in retirement are not that good. What concerns me is I have dutifully made the maximum contributions every year and still don’t have enough built up. Luckily I have invested in investment grade commercial real estate for years so I am set for life at a very high income but that’s an option open to very few nowadays with the cost of good property insanely high. There are some opportunities in residential real estate but that’s hard fucking work.

    I would be interested to hear from anyone as to what you may or may not be doing to insure you have an ass kicking golden years. BTW fucking forget about Social Security being of any retirement use if you are under 40 or even 45. SSI is a joke, a gigantic Ponzi scheme.

    As an aside, I know of very few people on track for a decent retirement nest egg so if you aren't you are in the majority.
     
  2. SpeedoGuy

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    Not many people I know are saving for retirement. As I scan around my neighborhood and compare myself to my neighbros I see just about all of them possess bigger homes, newer cars, boats, RVs and stylish landscaping. Yet I know these neighbors make less salary than me.

    So how are they doing it? How can they afford all the trappings of the affluent suburban lifestyle? Simple. They must be living on credit (i.e. beyond their means) and not saving for retirement. And that's not a good long term plan
     
  3. B_spiker067

    B_spiker067 New Member

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    It's simple.

    1) When young run drugs, guns and money.
    2)Take the money and bury 'under an oak tree on a family members forty'.

    Its known as the Warren Zevon plan.
     
  4. D_Humper E Bogart

    D_Humper E Bogart New Member

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    How about the situation that either:

    A) Your company goes bust, you lose all your money.
    B) You are robbed by someone fiddling the numbers, who co-incidentially commits suicide and is last seen in Israel
    C) A terrorist crashes an ice cream van into two lamposts and by the will of god BILLIONS are blown off many pension schemes.

    "Never let people you don't know control your future".

    Anyway, what's wrong with uber savings accounts or buying stock in the millitary?
     
  5. jfrsndvs

    jfrsndvs Member

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    I know lots of people who have more house than they need or could really afford, drive suv's, and so on, it's true that they make more money than I do, however, in the long run, I will be the one ahead of their little game, the only payment that I have to make other than utilites and such is my mortage, and if all goes right, I will have that paid off in 2 years, way ahead of the scheduled pay off date, I pay extra on my house as I possibly can, I have no car payment, my truck was paid off from the get go, 200,000 miles later, it still can do all the things that those trucks sitting in driveways that cost 30grand or more, I have no credit cards, never have and never will.

    I am not afraid to shop at discount stores or buy generics at the grocery store, not to mention buy used clothes at a garage sale or a thrift store, I get laughed at all the time because I live way below my means, but I am not the one that has more month at the end of the money, I have more money at the end of the month.

    the borrower is slave to the lender, that is why I am doing everything I can to hurry up and get this house paid off, and then I won't be any slave to any lenders.


     
  6. rob_just_rob

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    Good post, although I would contest one point you made...

    Why can't you risk any of this money? If you retire at 65, you can probably expect to live another 20 years or so. Your time horizon is still fairly long for most of this money, so you can afford to be less than completely defensive. Sure, you'll want to weight yourself more towards bonds, prefs, tbills, but there's no reason you can't have a growth component to your portfolio. Stay diversified (diversified by product, country AND industry) and your chances of a loss over even a 10-year time horizon are vanishingly small. Stay away from the hot growth stocks - if you buy stocks, dividend bearing ones have done the best in the long run.

    As for what I'm doing? I own my home, and I'm invested 30:40:30 Canada:USA:Everywhere else. My core stock holdings are dividend-bearing common shares with DRIPs set up. I invest regularly. I don't borrow very often, and I don't borrow unless the rate is close to prime. I do have a "play account" for cyclical buying and option strategies, but the bulk of my holdings are in large-cap names with fat dividends.

    Bottom line: There's no sure thing; don't ever put all your eggs in one basket.
     
  7. invisibleman

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    I want the retirement plan Jesus Christ had.
     
  8. invisibleman

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    Why are you concerned about this? You bring up a lot of issues that exponentially breeds more questions and issues. There are haves and have nots. The questions and answers are different for everybody. How does everybody get to retire to live comfortably? How does everybody get decent heath care and insurance? Where does the money come from when you don't have it to spend? What are the options? What are the plans? Not everybody has access and know-how about retiring and investing. There are plenty of poor in this country. What about these guys?

    I think that you have more saved than many do. $300K isn't dog shit either. If it is so much dog shit to handle--you can give me $300K.
     
  9. viking1

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    No offense to anyone, but this is a joke for the average blue collar working class like me. I would like to make $50,000 now while I am still working.
    Having that as an income after retirement is just fantasy for me.
    I probably won't take home 1.2 million in my life unless something changes in a hell of a hurry.

    I know S.S. is a joke, but what can I do about it?
    I have tried to save some. I have never borrowed money for anything.
    If I can't pay for it at the time I do without it.

    I know I will have to work until I die or am disabled. The disabled part may not be to far off the way my back is acting up. If this is what's coming I hope I wreck the frigin' truck or something to end it quickly before it gets to that point. What a great future the poor have to look forward to.
     
  10. transformer_99

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    I think this is one reason why Bush was pushing stock market retirements. The potential for return is there the way it's set up now. But when the plan if it ever gets pushed through will be easy pickings for fraud and scam artists. Look at Enron, they drug that out until Lay died, then whatever recourse was there vanished into thin air.

    My thoughts on those spending accounts, people reinvest their money back into companies that would turn around and offer insane salaries and bonuses to top level management, not to mention what the Board of Directors hauls in for themselves. Like the past few years of inflation, incomes wouldn't keep up and the disparity and discrepancy would widen deeper.
     
  11. AlteredEgo

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    The military is publicly traded?

    *NOTE: This is a serious question, despite my poor usage of grammar.
     
  12. rob_just_rob

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    Perhaps he's referencing defense stocks? Or Halliburton?
     
  13. AlteredEgo

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    I am not waiting for Social (in)Security to bail on me. In fact, when my last living relative dies, I plan to protest by no longer paying into Social Security if it hasn't been abandoned by then. My grandmother and her cousins don't depend on it either. Their income is from pensions and real estate. Okay, okay. So my grandmothers collect their husbands SS benefits. They are not dependent upon them. It allows them to do extravagant things like buy $50 deodorant, or take spur-of-the-moment cruises. I am not even thinking about pensions or SS. I am building what I hope to be the first of many businesses, I plan to invest in real estate, both small and commercial. I am known to put in 10-16 hour days for weeks at a time to that end. Sacrifice now, retire young enough to enjoy retirement. That's my plan. See you on the links in 23 years. I'll be 50. (I hope to be retired before then, but have not yet figured out how.)
     
  14. AlteredEgo

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    *dies while reading words, "Or Halliburton?"*

    I thought those were defense bonds. Bonds don't (to my knowledge, feel free to correct me) lose value. The interest is fairly low, this is non-agresive investing. Stocks are wholly different. I find the very idea intersting, as well as corrupt, and further corruptible.
     
  15. rob_just_rob

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    Once you're retired, I'm sure the Iraqi people will be lined up to thank you for paying for their thriving democracy with what would have been your social security. :rolleyes:
     
  16. Full_Phil

    Full_Phil New Member

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    With the world as it is, my guess is that the Stock Market holds as much risk as potential reward, if not more. The conservative idea of putting retirment money into the Market scares the pluperfect hell out of me.
     
  17. AlteredEgo

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    Read books about how the rich see money diferently from the middle-class. If all you are doing is working and saving, you are doing something wrong. If you never borrow money, you are doing something wrong. I won't go into greater detail because you are not likely to believe me, and I am not yet in a position to teach anyone what I've learned. I will only suggest you make google, a public library, and a discount bookstore your new best friends. Also, don't let people who are not rich tell you what to do with your money (which brings me back to me not going into greater detail about what you should be doing). If your banker isn't rolling in it, take his or her advice with a HUGE grain of salt, and keep looking and learning.
     
  18. rob_just_rob

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    Bonds don't lose their (principal) value if you hold them from issuance to maturity. Unless, of course, the issuer goes broke. If you want a bond with a yield higher than 5-6%, that's a risk you're normally going to have to take.

    Bond funds can definitely lose money over the short or medium term in a rising interest rate environment. Fund managers will roll over/ladder the bonds they hold (often not holding them to maturity, in other words), and at any given time the NAV of the fund is based on the current price of the bonds they hold, which may be less than face/maturity value.
     
  19. AlteredEgo

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    Today, you are even funnier than usual. I cannot even hope to keep up! LOL
     
  20. AlteredEgo

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    I almost understand this. Almost, but not quite. Could you please when you get a free moment, write to me privately about this and make it a little more plain? This is an area of great interest to me, but I have yet to do much research, and have no work-related experience. I have done all of my research on real estate, and know about bonds only as they relate to real estate.
     
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