How u Doing? Retirement savings.

[ma96782]

How u Doing?

401(k) Balance: How You Compare to Others Your Age

Aloha, Mark

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[03A3Sporter]

I made up some of what I lost in 2008 but I am far from where I want to be, and time is not your friend.

 

[parallax]

I did good. But being the greedy. Bastage that I am. I still want more. LOL. Somehow I circumvented the 2008 crash as well as the 2020 crash and didn't lose anything Now waiting for the right moment to jump back in the viper pits of investing

 

[arakboss]

My retirement savings is in terrible shape (a joke really). I hope you guys throw me some change or a sandwich when you see on the off ramp with a sign that says "spent all my money on guns and ammo instead of saving for retirement"

 

[dobeman]

How u Doing?

401(k) Balance: How You Compare to Others Your Age

Aloha, Mark

What? am I reading this correctly? whiskey tango foxtrot... 60 somethings only have $182,100 401k balance on average? I sure hope that group of folks has other savings/assets. So I'm doing pretty good I guess. But not where I want to be.

Sixtysomethings (Age 60–69)

• Average 401(k) balance: $182,100
• Contribution rate (% of income): 11%

 

[The Heretic]

Much better than average for my age (66 next month), but then I used to have a much better than average income from a job I used to have, and I put 25% into my 401Ks for about the past 8 years, maxing it out. Also, some of those years the market did really well, others it was flat, others it went down - so it averaged out to about 7.x%

It went down about $40K+ in February to March, but starting about a month or so ago it started to come back. Right now, I am just about $15K down from my January high. Once it gets above that high, I will then start thinking about going to cash (money market) to preserve the balance. I believe that come August, September, maybe as late as October or November, we will have another correction due to a resumption of CV-19 when half the people go back to workplaces and stay inside as the weather turns.

Also, by that time, the real effects on the economy (businesses that stay closed, reduced spending by both consumers and businesses) and the fact that half the people who were unemployed won't get their jobs back, will become apparent to most everybody.

The unemployment expansion will have expired, the extension will be nearing expiration (for some people it will have already expired) and any follow on programs will be less than what we have now - if anything.

Add this all up, and we will be well into a recession and it will be hitting home for a lot of people and businesses that this is not a temporary thing.

Translation (with regards to the bond and stock markets): a second downturn.

How much, how long and when it hits - I don't know, but I think it will hit.

So into cash I go at some point in the near future. If it doesn't hit by spring, then I will maybe have lost some earnings, but no principal.

YMMV

 

[The Heretic]

My retirement savings is in terrible (a joke really). I hope you guys throw me some change or a sandwich when you see on the off ramp with a sign that says "spent all my money on guns and ammo instead of saving for retirement"

I've been buying guns and ammo. Guns are on hold, but if you got any more good deals on ammo, I am keeping my eyes open.

 

[dobeman]

Much better than average for my age (66 next month), but then I used to have a much better than average income from a job I used to have, and I put 25% into my 401Ks for about the past 8 years, maxing it out. Also, some of those years the market did really well, others it was flat, others it went down - so it averaged out to about 7.x%

It went down about $40K+ in February to March, but starting about a month or so ago it started to come back. Right now, I am just about $15K down from my January high. Once it gets above that high, I will then start thinking about going to cash (money market) to preserve the balance. I believe that come August, September, maybe as late as October or November, we will have another correction due to a resumption of CV-19 when half the people go back to workplaces and stay inside as the weather turns.

Also, by that time, the real effects on the economy (businesses that stay closed, reduced spending by both consumers and businesses) and the fact that half the people who were unemployed won't get their jobs back, will become apparent to most everybody.

The unemployment expansion will have expired, the extension will be nearing expiration (for some people it will have already expired) and any follow on programs will be less than what we have now - if anything.

Add this all up, and we will be well into a recession and it will be hitting home for a lot of people and businesses that this is not a temporary thing.

Translation (with regards to the bond and stock markets): a second downturn.

How much, how long and when it hits - I don't know, but I think it will hit.

So into cash I go at some point in the near future. If it doesn't hit by spring, then I will maybe have lost some earnings, but no principal.

YMMV

you will still slowly lose purchasing power of the dollar denominated cash holdings. Depends on whose statistics you believe - but that is not trivial. Fed and policies are on a path to destroy the dollar.

 

[The Heretic]

The thing is, now that I am unemployed, no more contributions to the 401K. I could put some into the Roth IRA, maybe the conventional IRA, but I am instead holding cash in my checking account just in case. For now.

 

[dobeman]

The thing is, now that I am unemployed, no more contributions to the 401K. I could put some into the Roth IRA, maybe the conventional IRA, but I am instead holding cash in my checking account just in case. For now.

yep I hear you.. me too.

 

[The Heretic]

you will still slowly lose purchasing power of the dollar denominated cash holdings. Depends on whose statistics you believe - but that is not trivial. Fed and policies are on a path to destroy the dollar.

Maybe so. But my costs are mostly fixed - I have a mortage, property tax, food and insurance. Those costs don't change much.

Any loss due to inflation over 6 months won't be much and they won't begin to compare to the loss I had due to the market dump in February/March.

I am looking at being unemployed permanently now - no one seems to want to hire someone so close to retirement, especially not with the current number of unemployed code monkeys that are half my age. So it is probably retirement for me. Until things get sorted out and the market is less volatile, I am pulling out and going into cash sometime in the next month or two. I can't afford to ride out another downturn by staying in the market. Even if I had a secure job, I would probably go into cash just to be able to jump back in with cash when the market goes way down - which is what I intend to do either way, if it goes below 10% down.

 

[The Heretic]

From what I understand, all savings rates are up, including retirement. People are also holding cash. Being conservative with spending. This is good for the individual, although not so much for the economy. IMO, it smooths out the volatility of the economy although it will hurt a lot of businesses, I prefer people being able to pay their important bills rather than going to restaurants and buying a new TV or a new car.

I hope some people learn something from this; I have been saying for years that people should pay down debt as much as possible, not buy stuff on credit as much as possible, and save as much as possible.

Unfortunately 60-70% of our economy is consumer spending, and a LOT of that is unnecessary spending, and most of that which is revolving credit is unnecessary. I have no sympathy for the banks and credit institutions that provide easy high interest credit, that are suffering now, or the cruise lines, or resorts. Yes, I know they employ a lot of people, but it is unnecessary and it is more important that people be able pay for shelter, food and healthcare than it is that they have the latest iPhone or take a cruise.

 

[Medic!]

Prepare for tomorrow.
Pay off dept.

When things turn down. Many will look back and see how they pizzed away money. And regret it deeply.

Some already are.

 

[Snip]

My goal for retirement is having about $1.5mm of income producing assets hopefully returning about 4%/yr. My burn rate is about $5k/month in a high cost of living area. Here's a reasonable calculator: Linky

 

[308]

Since the plandemic market dropped back when the plandemic was a thing, we lost about 8% and then our Ameriprise adviser adjusted our portfolio, bought low and now we have recovered everything plus another 5-6% which actually adds up to quite a bit.

 

[arakboss]

Since the plandemic market dropped back when the plandemic was a thing, we lost about 8% and then our Ameriprise adviser adjusted our portfolio, bought low and now we have recovered everything plus another 5-6% which actually adds up to quite a bit.

Are you trying to say that buying high and selling low is not a good strategy

 

[308]

Are you trying to say that buying high and selling low is not a good strategy

No, I'm insinuating the companies we were invested in came back, and we moved cash management $$ over to other solid companies that were low and have also recovered. But yeah, I can see how you read that from my post...awe heck, I don't even know what you meant by what I meant...need coffee...lol

 

[The Heretic]

My current COL is about $2500/mo, which includes my mortgage. That happens to also be about what I should be getting from SSI in August.

My retirement funds are planned to not be touched for my living expenses. The plan was to save those for my daughter, so theoretically, they would continue to grow for another 20 years. At the normal rate of increase, they would double every ten years. Another part of that plan was, when I retire, to move as much as I could from my 401K/IRA to my Roth IRA, but only as much as I could while paying the lowest tax rate. That also coincides with the min RMD, but I would do that ahead of time before I reach 70.5 so that it is spread out over more years and I pay a lower tax rate. That way, the funds in the Roth would be available and tax free.

Right now, that plan is in peril for a number of reasons, but I am going to try to stick to it. I have to play it by ear until at least 2021, maybe longer. This year I will have too much income to move funds to the Roth from the regular IRA and pay low taxes. If I am successful in finding a job though, I will be putting the max into a 401K again. I had been putting in enough that it would be maxed by October (I had asked that it be done by August but they screwed that up) and then I got laid off in March - so I still got a lot to go for this year if I get a job (unlikely though).

 

[arakboss]

No, I'm insinuating the companies we were invested in came back, and we moved cash management $$ over to other solid companies that were low and have also recovered. But yeah, I can see how you read that from my post...awe heck, I don't even know what you meant by what I meant...need coffee...lol

I was kidding, it sounds like your advisor did well for you. Markets are getting close to pre-covid levels now.

 

[Snip]

My current COL is about $2500/mo, which includes my mortgage. That happens to also be about what I should be getting from SSI in August.

My retirement funds are planned to not be touched for my living expenses. The plan was to save those for my daughter, so theoretically, they would continue to grow for another 20 years. At the normal rate of increase, they would double every ten years. Another part of that plan was, when I retire, to move as much as I could from my 401K/IRA to my Roth IRA, but only as much as I could while paying the lowest tax rate. That also coincides with the min RMD, but I would do that ahead of time before I reach 70.5 so that it is spread out over more years and I pay a lower tax rate. That way, the funds in the Roth would be available and tax free.

Right now, that plan is in peril for a number of reasons, but I am going to try to stick to it. I have to play it by ear until at least 2021, maybe longer. This year I will have too much income to move funds to the Roth from the regular IRA and pay low taxes. If I am successful in finding a job though, I will be putting the max into a 401K again. I had been putting in enough that it would be maxed by October (I had asked that it be done by August but they screwed that up) and then I got laid off in March - so I still got a lot to go for this year if I get a job (unlikely though).

My only comment is to see if you can give to your daughter with a warm hand vs a cold one. It's nice to see them enjoy the monies you give them.