Posted on 04/22/2013 2:04:46 PM PDT by Kid Shelleen
Martin Smith, an Emmy-winning correspondent for PBS Frontline, is worried about his retirement and yours.
In his excellent Frontline documentary airing Tuesday, April 23, on PBS, The Retirement Gamble (check local listings), Smith, 64, says: I started saving for my retirement in my late 20s. But along the way I dipped into my nest egg
not once, but several times. And now, like millions of other baby boomers, I, too, dont have enough. Most of my savings went to pay for my kids educations. A divorce and the crash of 2008 didnt help either. Im now planning to work for as long as I possibly can.
(Excerpt) Read more at forbes.com ...
No darling, it ain’t free...YOU are paying for it....
Federal (CSRS) retirement is 55 if you have enough years in. Yeah, its not a bad gig, but the idea behind it was to keep US Civil Servants from being like those elsewhere (like Mexico) who operate on bribes and corruption.
Give those in gov lots of money and great benefits in the hopes of limiting corruption from those in government?
Boy that worked out swell...
WHAT MOVIE ??!!!!??
sorry for yelling,
I plan , I scheme ,I’ll drop dead At 60.
How about Costa Rica???
Got a Room for Rent?
SoCal is getting me down,
Lost In America
God Loves, Jesus Saves, Moses Diversifies
Spread your investments among non-correlated asset classes and not everything will be horrible all at once
We all got sold a bill of goods in the form of the 401. It traces its roots back to the Rats protecting the little people and punishing the rich. Seems they didn’t like the management getting bigger retirement benefits so they limited them via the 401. Look it up. Somewhere along the way other factors got involved to get rid of the burden of pensions to companies and Wall Street saw a great opportunity to increase revenue by fleecing the unwitting worker who was and still is ignorant of investing.
1. Pension fund managers disappeared and their ability to leverage for better rates of returns. Handling a big block of money with near certain funds flow gave great power and essentially allowed the pension fund managers to get annuities with very good rates of return.
2. IF you can make the traditional mean of about 7% you would be fine but the investment managers (hedge funds before 401s were about nonexistent) cream off 1 to 1.5%. Translated, they are taking about 14% of the gain each year. What was 4% over inflation returns has become about 2.5%... you can’t grow much with that.
3. Saving for retiremnt became a free for all with lots of wasted motion.
4. We have had this discussion here before all with the same result... unless you are part of a government defined pension plan that can get revenue to pay annuities by raising taxes from people who don’t have the means to fund their own retirement.... you are on the work until you die program or leave the country to live in Nicaragua until that system wises up and gets greedy.
5. Right now we aren’t even keeping up with real inflation. The growth in the last year or so has just been working on back filling the huge hole left by the losses of 2008... no real gain at all and we are not even back to the mean and I don’t see us getting there anytime soon or ever.
6. We have saved like fiends for nearly 40 years... mostly between 30 and 50% of gross and we have invested carefully. We can count the days of our vacations in the last 35 years and not use all our fingers and toes and had a close association with all the cars we have bought. Buy and hold have mostly been our plan because market timing responds to things that have already been factored in and generally has resulted in returns 2 to 3% under the buy and hold plan. Still, we suffered ‘87, ‘02, ‘08 and these are all huge holes to dig out of. Strangely, the inflation years of the late 70s and early 80s were some of our best. 20% 5 year zero coupon bonds were hard to beat if you bought them in about ‘82. Wish I had bought more for longer terms. I figure we might be able to harvest 3.2 to 3.5% of the egg per year but there is no comfort in that. It’s pretty clear hardly anyone has the $2,000,000.00 or so they should have to generate what I call a reasonable retirement. If the next 30 years are like the last 30 years disaster will come and we won’t be well enough to survive it and we won’t be back filling the losses to the egg with savings from income of working.
7. If you are on the horse (work) stay on it. If you fall off try to get back on as fast as you can and don’t let it run away. If you do let it run away you will be left behind to fend for yourself. Remember the guy who fell off his camel crossing the desert in Lawrence of Arabia? Lawrence isn’t coming back for you. Nobody has your back because nobody has theirs. It is every man for himself.
8. I told my guys more than 30 years ago when the defined pension plan was replaced with the 401 that we were all being suckered and that we all took a massive pay cut. I was dead right. Even the guy who dreamed up th 401 says it is a dreadful failure.
9. Health care costs and taxes are our greatest threats
10. The historical mean for inflation is 3% driven by the need to motivate people to continue to come to work, you have to provide raises, and 7% is the most prevalent rate of return throughout history, it is the reason we have almost always benchmarked to the alternate investment of NPV7. Strangely, if you manage to build a nest egg big enough for a trust it will run almost forever withdrawing about 4% per year... this is how the gentry of merry olde england lived once they built a fortune. Build a spreadsheet and let it run and see for yourself.
11. Retirement isn’t in the Bible
12. I sure am tired though and many days wonder how much longer I can keep on keeping on. The bad odds are going to catch up with me. I figure that if I am successful and play the odds right I will die wealthy, the kids will get some and the feds will get most of the fruits of my labor. It is damn depressing.
0430 comes soon. Most of us are well and truly screwed. Bye.
Ha, ha, very good!
About all I can afford to invest in is canned tuna, peanut butter, and dog food for our “auxilliary security system”.
I have a one bedroom one bath casita....when you want to come down?
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