According to an article in Fox business only 22% of Americans aged 55 or older have $250,000 or more in retirement savings. I question also that of that 22%.....how many have suffered the loss of their job during the Great recession? Relatively few of them I suspect. For those of you lucky enough not to have suffered the loss of employment during the 2007-2009 economic crisis I commend your foresight in being in the right job.....( or dumb luck.. ).... or as some of you would have it.. your ability to set yourself apart as unexpendable ( ...yada...yada...yada.... :roll: ). "•Writes Kathryn Buschman Vasel on Fox Business: According to the Employee Benefit Research Institute, only 22% of workers 55 or older have $250,000 saved for retirement. What's more, 60% of that same age group has less than $100,000 socked away. Clearly not enough to retire." •The Post adds, "Overall, people ages 55 to 64 have a median retirement account balance of $120,000, Boston College researchers have found, which is enough to fund an annuity paying about $575 a month, far short of what they will need." •The Post also says that "the Center for Retirement Research estimates (.pdf file) that 53% of American workers 30 and older are on a path that will leave them unprepared for retirement," compared with 38% in 2001 and 30% in 1989. This isn't a trend; it's a road to poverty. •Half of workers have no retirement plan through their employer, the Post says. Blame goes to the usual suspects -- stagnant wages and a Great Recession that obliterated a lot of middle-class net worth. Rising health care costs and increasing debt among older Americans are also singled out. -However, a lot of the recent coverage focuses on the inadequacy of the 401k to fund a secure retirement. ( amen to that ) I have been so paralyzed since the loss of my job in 2008 I have been unable to pull the trigger and get back in to the market in a way in which I could have taken advantage of the recent upswing in the DOW. Pretty uncharacteristic for an erstwhile risk taker like me but when you find yourself unemployed in the midst of a Depression it's very hard to get back up on that investment horse so I have kept what 401K funds I preserved upon my layoff in the same damned fixed low return fund that I moved them into on the day after my layoff. I have probably missed out on about a $50,000.00 gain in the interim. And of course couple that with the loss of all of my home equity built up over 16 years. Man.....what a frustrating set of circumstances.
Yes, your situation is one that I would not want to be saddled with. However two points to make here: 1) If you think the economic crisis was only 2007 to 2009, you haven't seen the crisis that your children are now saddled with. 2) If you don't, at some point, put this behind you, your situation will be the same in 20 years. You can't change the past. Put it behind you and find something to be positive about.
All I ever had was a 401K. It did for me pretty well. I wish I could have funded it even more but the gov't restrictions limited what we could do. I think that too many folks: A. Don't participate in their 401K's B. Don't contribute to the max. C. Pick funds that are too conservative. There are also places that don't provide good enough plans...either not allowing or contributing enough for their employees or not enough variety of investment options. Perhaps you fell into those categories, Dave. Defined benefit contribution plans died on the vine a long time ago. Corporations realized that they were an unsustainable pyramid system, and they bailed. (appropriately, in my opinion...though I wish I had had the opportunity to have one.) Except, of course, for government employee retirement funds, which just kept going and going....like............the..................Energizer......................bunny until they have now run out of electricity, er, money.
Stu....it's a lot easier to have balls and keep fully invested when you are gainfully employed.....but very difficult when you have no job.....especially no job in a near depression and you start counting what cash you have on hand to survive. Then....poof goes your home equity......and simultaneously your trust level of all things Wall Street has been shattered by the strange goings on of the mid-2000s. Good posts Tom and Bobda.....and Bobda I agree 100% with your insight. Going forward.... when you have diminished the buying power of our nation's youth and of the huge boomer generation in it's retirement years then how can you expect to have a healthy economy?
Dave, Your actions are totally understandable given what had occured. My own 401K took an absolute beating, and I was thinking the same way. But I realized that if i ever wanted any of it back, there was only one way to get it - Leave it in. So I did... and I've gotten a lot of my losses back. Right now I'm a little nervous with the market... It's been running well for a while. You never know when another "correction" is coming, especially with this economy. I'd sure like to get ahead of the next blip, and go conservative BEFORE the rug gets pulled out this time. I wonder if there were a lot of folks who are currently in their low to mid 50's who still had illusions of having Social Security to bolster their retirement? I've never believed it would be there, so I've always put a good chunk in my 401k, and a smaller amount into IRA's.
110 minus your age in stocks...and leave it that way, adjusting every year. Timing the market is a fool's game. I tend to buy high and sell low (my car salesman loves me.)
Stu, solid, sound advice.....had John Q Public followed that course, his retirement account would be at an all time high today. A couple added considerations.....by "stocks" the prudent course would be a well-diversified portfolio of solid names or better yet investing in one of the many index funds or ETF's....e.g., S&P 500 or Wilshire Total Market Index -v- picking and choosing individual names yourself - MUCH better risk/return tradeoff for individual investors. Also "adjusting every year" but also REBALANCE, REBALANCE, REBALANCE periodically.....I choose a quarterly timeframe for folks for convenience sake but also it coincides with reporting periods typically.....the process enforces a simple, easy to employ yet solid buy low, sell high discipline.