I'm curious as to what you were invested in? I don't have a single investment client whom hasn't fully recovered. In fact, they have all more than fully recovered.
So what is it that you invested in that has left you still trying to recover?
Time To Raise Retirement Age
- Thread starter Robert Barney
- Start date
I'm curious as to what you were invested in? I don't have a single investment client whom hasn't fully recovered. In fact, they have all more than fully recovered.
So what is it that you invested in that has left you still trying to recover?
- 10,812
Either he exited equities after the crash and didnt catch the rise back up, or he is in very poor performing funds.
Either way, if the recession affected him that much that close to retirement he was way too overexposed in equities (as most people are).
I certainly have sympathy for those affected by market swings, but failing to properly plan for market risk ultimately is your personal responsibility.
Traditional portfolio management tells us that a 60 year old should have around 40% of their portfolio in equities and 60% in fixed assets.
How many 60 year olds with 401Ks have 60% of their portfolio in fixed assets or safe assets?
The answer is not many.
Sure you might have a lot of ground to make up to get to your retirement goal, & this is why people take more of a risk than they should; but if its so important, dont you want to protect those assets?
Wouldnt the loss of those assets be devastating?
After appropriate savings, managing risk is the biggest downfall of retirees. (no, not all retirees fit into this description, just most)
I had a 68 year old tell me the other day that he cant "afford" to reduce his stock exposure (he is 100% mid & small cap)
I told him that another 08' would destroy his life savings.
His response was that it would never happen again in his lifetime.... we will see...
Either he exited equities after the crash and didnt catch the rise back up, or he is in very poor performing funds.
Either way, if the recession affected him that much that close to retirement he was way too overexposed in equities (as most people are). --- NO. I had almost everything in mutual funds. Less than 10% in stocks. However my asset allocation was aggressive but in my late 50's. I was no different than many in my situation... I had to borrow a lot to keep afloat during the slow death of my company, all the while our union negotiated away salary for ESOP to buoy the company financials. When it went BK, I had those loans to pay off. With the economic plunge in value, I saw interest rates higher on my loans than the loss in the market, so I withdrew from my 401k to restructure my debt load because without a salary, I couldn't make my loan payments.
I certainly have sympathy for those affected by market swings, but failing to properly plan for market risk ultimately is your personal responsibility. --- I had no financial guidance other than the union-provided money managers. It is easy for someone to critique Sunday's game on Monday. There were a lot of us that brought the issue to fore about the lack of professional financial assistance to employees who had the early 401k's. What we know now is based on the hard lessons learned by those of us who took the first salvo. When companies first started offering 401k's, they dumped their expensive pension oversight and failed to provide guidance for 401k planning. I studied everything I could and followed what advice I got. "You can't catch a falling knife... hang tough. You will catch the market on the rebound." B.S.!! When it is gone, it is gone! How much performance does it take to make up for a 50% loss? Just how many of you think you can pick an investment that will provide 100% ROI? I had been through big losses in years before and recovered, but not this time. We are talking 2000. Not a couple years ago... During the 90's EVERYBODY was making money. My 401k was riding high (a rising tide lifts all boats, right?) No one forecasted the triple punch of dot-com bust, Wall St executive scandals, and terrorist attacks.
...failing to properly plan for market risk ultimately is your personal responsibility. ---I hope you don't sell health insurance. I can just see you telling someone with pancreatic cancer that their health is their own personal responsibility! What you are saying is: "You are too stupid to deserve help."
The majority of your post is Monday morning quarterbacking. Hindsight is 20/20, you know. Yes, I could have done some things better... my point is that no matter what I did, things were really bad and out of my control. There were other pressing issues I don't care to divulge that acerbated my problem, but I am sure many financial professionals screwed up big time during that period, too. I bet you were only in high school at the time, so you wouldn't understand.
What I learned from my past experience I try to pass on to my clients, but I certainly don't look at them as idiots.
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- 10,812
OK.
You are a valuable member of this forum, and from what I can tell a good guy. You obviously tried your best to save for retirement and it didnt go exactly as planned, and you got screwed by the man a time or two.
This is obviously a very personal subject for you.
That post was not meant to be offensive.
If it was, it was not my intention.
But lets remember that this forum is supposed to be a professional forum (yeah, I know what you all are thinking right now).
And is the point of a professional forum not to exchange in critical thinking about our profession?
Did your experience not have relevance to our profession? (I will assume it did since you posted it)
Can lessons about the future not be learned by "hindsight" of your experience?
Should your experience not be used as a learning tool about how to properly plan in an unpredictable world?
If not, why post it on a professional forum??
Im sorry if you did not enjoy me using you as an example; but you put your story out there as one to use. (on two different threads)
Yes some tragic things happened to you along the way; it wasnt just due to your investment decisions.
But you are correct when you say hindsight is 20/20.
This is why we look at our history as in indicator of the future.
This is why we learn from our history.
I was not trying to point out any personal blunders of yours; I was pointing out the blunders of clients in general. And yes, I only pointed out the technical side of things. Not the side of things were life slapped you in the face. But there is only so much we can control in life; so why not control what we can in a prudent manner?
You are a valuable member of this forum, and from what I can tell a good guy. You obviously tried your best to save for retirement and it didnt go exactly as planned, and you got screwed by the man a time or two.
This is obviously a very personal subject for you.
That post was not meant to be offensive.
If it was, it was not my intention.
But lets remember that this forum is supposed to be a professional forum (yeah, I know what you all are thinking right now).
And is the point of a professional forum not to exchange in critical thinking about our profession?
Did your experience not have relevance to our profession? (I will assume it did since you posted it)
Can lessons about the future not be learned by "hindsight" of your experience?
Should your experience not be used as a learning tool about how to properly plan in an unpredictable world?
If not, why post it on a professional forum??
Im sorry if you did not enjoy me using you as an example; but you put your story out there as one to use. (on two different threads)
Yes some tragic things happened to you along the way; it wasnt just due to your investment decisions.
But you are correct when you say hindsight is 20/20.
This is why we look at our history as in indicator of the future.
This is why we learn from our history.
I was not trying to point out any personal blunders of yours; I was pointing out the blunders of clients in general. And yes, I only pointed out the technical side of things. Not the side of things were life slapped you in the face. But there is only so much we can control in life; so why not control what we can in a prudent manner?
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Yes... your apology is accepted. You really did come across as "holier than thou", and this is what burned me. But you are right, we can learn from these experiences. That is exactly why I was transparent in relating my story and put it out there. I am not sure many others would have taken the time or ventured the risk to do this as I have.
I was afraid there would be the rush to judgement and point out what I "shoulda" done, rather than recognize that there are many who get caught in rather exceptional circumstances which, if not given consideration, just build barriers rather than bridges. I am glad you had the decency to smooth out your former remarks.
One of the things about studying for professional development is the recognition that, no matter what the "right thing to do" is preached... people do make mistakes, not all of which is the result of stupidity, and openness to learn how to help requires an objective point of view. Some plights of difficulty are the result of ignorance, some from unavoidable circumstances beyond one's control, some of poor guidance.... and this last point should not be overlooked. Some professional advice may very well be wrong.
If taken in the correct light, a number of things can be learned from my case report. I have come a long way since my disastrous financial situation and I'm now learning just what "I should have done" and when it should have been done.... I previously had no knowledge of the tools available to protect from or mitigate the consequences of severe downside market risks. Don't assume these professional tools are known wide publicly.
This post is getting too long, so I am going to break it up. I will describe where I was when the "tsunami" of 2000 hit.
- - - - - - - - - - - - - - - - - -
Prior to 2000, I had a 401(k) that, by about 1990, was valued at about $300K. I built that up to about $800K during the boom of the '90s. This was at a time when, while the rest of the country was experiencing growth, my company was declining and my salary was stymied. Perhaps you have heard of Carl Icahn, maybe not, but he was a "robber baron"... who took over my company and stripped it of its assets and left it weak, and eventually placed in BK.
Part of past negotiations had implemented this 401k as an adjunct to the previous defined benefit plan. Thankfully, it was frozen and not replaced. I had no idea that a day would come when this little pension would be all that was left after my 3/4 mil defined contribution plan would go bust.
We had no financial pros in HR to help us with our needs. It was considered that we were paid enough that we seek that help outside of the company. I looked to my union, and their help was deceptively given. That is, what appeared to be good advice, turned out to be woefully lacking.
Nevertheless, one experience I learned from was a large market loss, (about $80,000 one month... August of 1998 IIRC) which I was advised to "hang tough so as not to miss the rebound". I did, and by that November was made good.
This was a setup, because when the Big Recession came in 2000, by the time I realized this strategy was doomed, it was too late. I lost 50% so quick it made my head spin.
I retired in 2000 due to the looming BK on the horizon, and with retirement, decided that if I didn't enjoy at least some of the fruits of my life-long savings before it was all gone, I would just sit there and watch it wash away. I had scrimped and saved most of my life and now yielded to the frustration at the picture I saw of my future. I abandoned the hands on management of my portfolio and decided to let the portfolio money managers do all the work. I did, however, roll over a small chunk ($50,000) to an IRA I set up to play with on my own. I wanted to see if I could do as well as the pros. I did. I lost 50%, same as them.
I allocated my funds with a good mix of stock funds, bond funds, growth, international, etc. I watched the performance and re-allocated a couple of times during each year when needed. I did not buy any mutuals outside of my qualified accounts. I did speculate with some stocks on a limited basis (which I lost my shirt on .... MSFT, e.g.), but that was with the little IRA.
The story of my life: "I invested in the market until it was all gone."
I awakened one morning to the smell of coffee brewing and realized that I needed to get a job.
That's my case. There are others like it. I have yet to find a financial advisor that understands this predicament, much less has any advice as to how to resolve the issue other than say, "You shoulda done this, or You shoulda done that."
Second chance retirement planning is not being taught.
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- 7,790
To quote a cliche, "Old age is not for sissys!"
Part of my solution has to do with reducing taxes on RMD's in exchange for giving up SS. The money comes from two different tax pools. SS comes from the SS trust, funded by fica, and RMD's go into the general income tax fund.
This could help build the SS trust fund back up, but still allowing seniors to have an equivalent income source from a reduction in RMD taxes.
This could help build the SS trust fund back up, but still allowing seniors to have an equivalent income source from a reduction in RMD taxes.
- 15,041
Except for one problem. I'm almost positive the amount of SS payments dwarves the amount of qualified money. That'd only last a year or two and then they'd be right back to SS. Some retirees have NO qualified accounts. Plus the government cannot afford to give up the revenue off of RMDs.
- Thread starter
- #90
- 1,411
This guy is saying what I have been saying for years:
Many of us won
Anybody who can crunch the numbers (I use my Retirement Investment Analysis) knows people don't have enough saved for retirement.
Retirement Calculator
And even if you are sitting on lots of cash, Obama is printing money and wiping it out as we speak.
Whatever you do, don't quit your day job.
Many of us won
Anybody who can crunch the numbers (I use my Retirement Investment Analysis) knows people don't have enough saved for retirement.
Retirement Calculator
And even if you are sitting on lots of cash, Obama is printing money and wiping it out as we speak.
Whatever you do, don't quit your day job.
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