PBS Frontline : The Retirement Gamble, sorta Must See (2 Viewers)

[humpback]

I have less faith in government than most, but I can't imagine that they would just completely renege on Roth's. I could see them changing a bunch of things going forward, including grandfathering them, requiring distributions (so people are forced to spend the money or put it in other vehicles that would then be taxable), etc., but not just outright changing the balances from tax-free to taxable.

 

[Johnnymac]

All "They can do anything, they're the gov't" jokes aside....can they actually do that to Roth IRA holders? In practicality, you're taking potentially hundreds of thousands of dollars away from people's retirement. Will this fly reputation-wise?

I think they could but doubt they will. If anything it would probably be like the taxation of social security benefits, if your income is over X then Y% of your Roth distribution will be taxed. It's easier to sell to voters if only people with incomes over (insert random number here) pay tax on Roth distributions.

I have to think that they'd grandfather-in already-existing Roths or something like that. Like an Old Roth and a New Roth type of thing.

How could it ever be taxed twice? That's the whole purpose of a Roth, to pay taxes now so you dont have to pay when you withdraw. If the govt decides they are going to tax it both ways then there will be no more Roth.

 

[Brony]

I have less faith in government than most, but I can't imagine that they would just completely renege on Roth's. I could see them changing a bunch of things going forward, including grandfathering them, requiring distributions (so people are forced to spend the money or put it in other vehicles that would then be taxable), etc., but not just outright changing the balances from tax-free to taxable.

BUT IT HAPPENED IN ARGENTINA!!!!

 

[mquinnjr]

No way will Roth distributions ever be taxable.

Anything is possible when it comes to stripping away tax holidays like those that Roth IRA accounts currently enjoy, and I feel like it's irrational to think otherwise. I've been hammering away at these accounts with that in mind, so I'm sure someone will "fix the glitch" before I get to enjoy tax-free investment growth over multiple decades.

I really, really, really would be surprised if the government decides to fully tax Roth IRA distributions down the line.

I could see them doing away with the Roth altogether. I could see them changing Roths more along the lines of non-deductible IRAs - taxpayer allowed tax-deferred growth and has a basis in the IRA, with tax paid on income earned when distributed.

To me, the idea of grandfathering "old Roths" seems like something they would do. Or perhaps locking in a current value at a fixed date (December 31 20xx) as a non-taxable basis. Something like that. But I don't think they'll turn around and make the entire value of everyone's Roth IRA taxable. As much as we like to bag on the government and the IRS, the tax code is generally pretty fair, in my opinion. Declaring the entire value in everyone's Roth to be fully taxable is unfair. I have enough faith in the government that they'd recognize that and offer some sort of provision to avoid double-taxation on the amounts previously contributed.

I don't disagree, but I always assume the worst with a deal as good as a Roth IRA. Something along the lines of "freezing" contributions would make sense, which is fair but still turning off the record at the party with the maxing out of the contributions a big key.

 

[Jayrod]

Absolute worst case scenario is somehow they decide to tax the gains. I would think there would be some legal ramifications to trying to tax the already taxed contributions. Plus the people that have money in Roths have a good chunk of money so they're not going to be able to just come and take new taxes without a serious fight.

Has there been any precedents for something that was set as a specific vehicle and then that vehicle being changed? I don't know if any case of the IRS doing anything like that.

 

[eoMMan]

Absolute worst case scenario is somehow they decide to tax the gains. I would think there would be some legal ramifications to trying to tax the already taxed contributions. Plus the people that have money in Roths have a good chunk of money so they're not going to be able to just come and take new taxes without a serious fight.

Has there been any precedents for something that was set as a specific vehicle and then that vehicle being changed? I don't know if any case of the IRS doing anything like that.

Exactly. Many people choose a ROTH over a traditional IRA because they understand the differences and think that by foregoing the tax deduction now, they will more than make up for it several years later when they make their tax free ROTH distributions. If these distributions are suddenly taxable or even part of them are taxable, you'll have a huge mess on your hands. I would fully support the people who would want to sue the government for reneging on the deal.

 

[culdeus]

Absolute worst case scenario is somehow they decide to tax the gains. I would think there would be some legal ramifications to trying to tax the already taxed contributions. Plus the people that have money in Roths have a good chunk of money so they're not going to be able to just come and take new taxes without a serious fight.

Has there been any precedents for something that was set as a specific vehicle and then that vehicle being changed? I don't know if any case of the IRS doing anything like that.

I think you might look at the 1986 congress handling of the first pass at the generation skipping transfer tax for a precedent.

 

[Jayrod]

Absolute worst case scenario is somehow they decide to tax the gains. I would think there would be some legal ramifications to trying to tax the already taxed contributions. Plus the people that have money in Roths have a good chunk of money so they're not going to be able to just come and take new taxes without a serious fight.

Has there been any precedents for something that was set as a specific vehicle and then that vehicle being changed? I don't know if any case of the IRS doing anything like that.

I think you might look at the 1986 congress handling of the first pass at the generation skipping transfer tax for a precedent.

Thanks for this, it was interesting researching that.

From what I can tell, in 1986 they still grandfathered any trusts in place before that, so they didn't come in and retroactively change the rules on existing planning that was in place.

 

[culdeus]

Absolute worst case scenario is somehow they decide to tax the gains. I would think there would be some legal ramifications to trying to tax the already taxed contributions. Plus the people that have money in Roths have a good chunk of money so they're not going to be able to just come and take new taxes without a serious fight.

Has there been any precedents for something that was set as a specific vehicle and then that vehicle being changed? I don't know if any case of the IRS doing anything like that.

I think you might look at the 1986 congress handling of the first pass at the generation skipping transfer tax for a precedent.

Thanks for this, it was interesting researching that.

From what I can tell, in 1986 they still grandfathered any trusts in place before that, so they didn't come in and retroactively change the rules on existing planning that was in place.

That is correct.

 

[Doctor Detroit]

No way will Roth distributions ever be taxable.

Absolute worst case scenario is somehow they decide to tax the gains.

See how fast you waffled? I'm not saying it will happen, I just suggested it's not out if the question and some financial experts aren't dismissing the possibility either.

Doing away with the Roth vehicle is something government could do down the road, although I doubt current accounts would be impacted.

It's just something worth noting now imo.

 

[Doctor Detroit]

I don't agree with DD often...

To be honest, I've been disagreeing with myself a lot lately.

 

[Jayrod]

I don't agree with DD often...

To be honest, I've been disagreeing with myself a lot lately.

Apparently me too.

 

[Binky The Doormat]

No way will Roth distributions ever be taxable.

Absolute worst case scenario is somehow they decide to tax the gains.

See how fast you waffled? I'm not saying it will happen, I just suggested it's not out if the question and some financial experts aren't dismissing the possibility either.

Doing away with the Roth vehicle is something government could do down the road, although I doubt current accounts would be impacted.

It's just something worth noting now imo.

Whatever can possibly #### you in the ### ...the govt is liable to do.

 

[ajm27501]

I would imagine we may be underestimating the effects that forced distributions, even untaxed, would have on both the economy and driving revenue. The key to those distributions as far as a benefit to the government would be getting those funds into circulation, either in taxable investments or spending to drive the economy, generating tax revenue that way. There wouldn't be the need to tax the actual distribution and open up that Pandora's Box.

 

[Sand]

Very interesting article about a SCOTUS case coming up about high 401k fees. We'll see what SCOTUS says about the legal responsibility of fiduciaries here.

 

[Chadstroma]

I have been too busy to be around these days but I stumbled upon a website that made me think of this thread. I did a quick search of the last few pages in case it was already brought up and did not see anything. If already talked about.... please forgive me.

FeeX.com

Apparently started by the co-founder of Waze (which I loved to death when I was commuting heavily). All you do is plug in your financial website and they pull the info. They then do a search on your current funds and pull all the fees. They then make suggestions on similar funds with a lower cost. Absolutely awesome. I put some time into finding low cost funds but this one found even lower cost funds that are 95-99% similar to the ones I am in.

HIGHLY SUGGESTED!

 

[humpback]

401(k) and IRA Changes Coming in 2015

 

[mquinnjr]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

 

[eoMMan]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

Meh. The investment option for the MyRA....not good.

 

[fourd]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

Meh. The investment option for the MyRA....not good.

I think it's fine for the people it was designed for. Lower income, never saved before, don't understand how markets work. They can start simply and, when they get kicked up in plan they have a nice start. No risk of losing principal so they won't be tempted to bail when they open that statement down 10%.

 

[kutta]

401(k) and IRA Changes Coming in 2015

"Savers with an annual income of less than $129,000 for individuals and $191,000 for couples will be eligible to participate."

 

[Juxtatarot]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

Meh. The investment option for the MyRA....not good.

I think it's fine for the people it was designed for. Lower income, never saved before, don't understand how markets work. They can start simply and, when they get kicked up in plan they have a nice start. No risk of losing principal so they won't be tempted to bail when they open that statement down 10%.

The only issue I have is this will do so little to solve the retirement savings crisis we will see in coming decades. Is it even worth doing? How many MyRA participants will end up having reasonable retirement nest eggs? $5 a paycheck is basically nothing.

 

[shady inc]

I have been too busy to be around these days but I stumbled upon a website that made me think of this thread. I did a quick search of the last few pages in case it was already brought up and did not see anything. If already talked about.... please forgive me.

FeeX.com

Apparently started by the co-founder of Waze (which I loved to death when I was commuting heavily). All you do is plug in your financial website and they pull the info. They then do a search on your current funds and pull all the fees. They then make suggestions on similar funds with a lower cost. Absolutely awesome. I put some time into finding low cost funds but this one found even lower cost funds that are 95-99% similar to the ones I am in.

HIGHLY SUGGESTED!

FutureAdvisor does this as well. They'll also total up all your various accounts and whatever funds to check if you're over invested in a particular area by virtue of your fund holdings. Like, if you have a tech-sector fund and a general nasdaq fund they'll let you know if the nasdaq fund doubles up on the tech one leaving you overexposed to the sector.

Had never head of FutureAdvisor until reading this post. Read some reviews on it, and signed up. Just using the free portion of the site for now, but interesting to see what they suggest as far as re-balancing my (small) portfolio.

Anyone else use this or similar sites?

 

[mquinnjr]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

Meh. The investment option for the MyRA....not good.

I think it's fine for the people it was designed for. Lower income, never saved before, don't understand how markets work. They can start simply and, when they get kicked up in plan they have a nice start. No risk of losing principal so they won't be tempted to bail when they open that statement down 10%.

Yeah I mean it's a nice idea, but that's not going to even apply to the majority of people that have enough interest to follow this thread in the first place. Was expecting to see something negative and more immediate in terms of clamps being put down on the traditional/Roth before I clicked the link, so I walked away pleased.

 

[mquinnjr]

401(k) and IRA Changes Coming in 2015

Was afraid to read this, it's all good stuff IMO!

Meh. The investment option for the MyRA....not good.

I think it's fine for the people it was designed for. Lower income, never saved before, don't understand how markets work. They can start simply and, when they get kicked up in plan they have a nice start. No risk of losing principal so they won't be tempted to bail when they open that statement down 10%.

The only issue I have is this will do so little to solve the retirement savings crisis we will see in coming decades. Is it even worth doing? How many MyRA participants will end up having reasonable retirement nest eggs? $5 a paycheck is basically nothing.

I worked from home today and had the TV on in the background, saw a bunch of reverse mortgage commercials on. The MyRA is something that I'd think would apply more to that crowd, people who don't have unlimited income and chose to pound their mortgage vs. the market over the long term and need to make a move when they realize that it's time to do so later on in the game.

 

[Doctor Detroit]

Reverse mortgages are the worst and those damn commercials are on all day on the news channels. Cal Ripkin is pimping them now, must be tough finding scratch if you are a legend I guess.

In a thread related note, my parents who have been retired for about seven years now have their finances all screwed up. It wasn't a concern for me before but my Mom has been in the hospital for the most of the past two months, nearly dying. So when I was home I pressed my Dad about the finances, for which he does not handle.

$5000/month income

No mortgage

Car payment of $375 for which the last payment will be made in April

$11k in their checking account

$17k in credit card debt, much of that on cards north of 15%



I tried to find out what they bought and it comes down to small appliances and fad diet plans. oof

 

[wilked]

myRA is fine but won't apply to most here. If you are just starting a Roth it is not a bad way to go

 

[Sand]

Reverse mortgages are the worst and those damn commercials are on all day on the news channels. Cal Ripkin is pimping them now, must be tough finding scratch if you are a legend I guess.

In a thread related note, my parents who have been retired for about seven years now have their finances all screwed up. It wasn't a concern for me before but my Mom has been in the hospital for the most of the past two months, nearly dying. So when I was home I pressed my Dad about the finances, for which he does not handle.

$5000/month income

No mortgage

Car payment of $375 for which the last payment will be made in April

$11k in their checking account

$17k in credit card debt, much of that on cards north of 15%



I tried to find out what they bought and it comes down to small appliances and fad diet plans. oof

So this is pension and SS income? If so that should be more than enough to handle that bit of debt and get back to steady. Unless they live in a mansion (or NJ) and their taxes are sky high.

 

[Doctor Detroit]

Reverse mortgages are the worst and those damn commercials are on all day on the news channels. Cal Ripkin is pimping them now, must be tough finding scratch if you are a legend I guess.

In a thread related note, my parents who have been retired for about seven years now have their finances all screwed up. It wasn't a concern for me before but my Mom has been in the hospital for the most of the past two months, nearly dying. So when I was home I pressed my Dad about the finances, for which he does not handle.

$5000/month income

No mortgage

Car payment of $375 for which the last payment will be made in April

$11k in their checking account

$17k in credit card debt, much of that on cards north of 15%



I tried to find out what they bought and it comes down to small appliances and fad diet plans. oof

So this is pension and SS income? If so that should be more than enough to handle that bit of debt and get back to steady. Unless they live in a mansion (or NJ) and their taxes are sky high.

No SS, just pension. Yes I know, but having $17k in CC debt is ridiculous. They could easily pay down what they owe each month and they both know it.

 

[Sand]

Reverse mortgages are the worst and those damn commercials are on all day on the news channels. Cal Ripkin is pimping them now, must be tough finding scratch if you are a legend I guess.

In a thread related note, my parents who have been retired for about seven years now have their finances all screwed up. It wasn't a concern for me before but my Mom has been in the hospital for the most of the past two months, nearly dying. So when I was home I pressed my Dad about the finances, for which he does not handle.

$5000/month income

No mortgage

Car payment of $375 for which the last payment will be made in April

$11k in their checking account

$17k in credit card debt, much of that on cards north of 15%



I tried to find out what they bought and it comes down to small appliances and fad diet plans. oof

So this is pension and SS income? If so that should be more than enough to handle that bit of debt and get back to steady. Unless they live in a mansion (or NJ) and their taxes are sky high.

No SS, just pension. Yes I know, but having $17k in CC debt is ridiculous. They could easily pay down what they owe each month and they both know it.

Agreed, but at least they have the means to pay it back.

 

[Doctor Detroit]

A new study shows most middle-class Americans are failing miserably when it comes to preparing for retirement.

The study was full of bad news, including that 34 percent of middle-class Americans aren't contributing anything to a 401(k) or other retirement savings vehicle. Even worse, 41 percent of those 50 to 59 are not currently saving for retirement. Nineteen percent of all respondents have no retirement savings at all.

It appears that procrastination is playing a big role: 55 percent said they plan to save "later" for retirement to make up for not saving enough now.

"Saving for retirement isn't easy," Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, said in a release. "If people in their 20s, 30s and 40s aren't saving today, they are losing the benefit of time compounding the value of their money. That growth can't be made up later, so people have to commit early in life to make savings a regular discipline year after year — it is the only way most people will achieve their financial goals to carry them through retirement."

The survey showed that middle-class Americans saved, on average, a total of $20,000, which is down from $25,000 last year. Most expect to need at least $250,000 for retirement but are saving only about $1,500 a year.

About 70 percent said they have a 401(k) plan available to them, and 93 percent currently contribute to that plan. Only 67 percent contribute enough to maximize their company's 401(k) match.

About 58 percent of people without access to a 401(k) plan said it is not possible to pay bills and save for retirement. For those who do have access to a 401(k) plan, only 32 percent said they can't save and pay bills.

About 70 percent of people have no confidence in Social Security being a primary funding source for retirement. Combined with not having enough savings, about one-third say they will need to work until they are 80.

On the first bolded, WTF???? Stock market up more than 13% over the past 4 years, incredible.

On the second bolded, WTF? Giving away free money is the biggest mistake I can image financially, the 33% not maxing the match are morons. There is no excuse for that, none.

On the gains over the past four years...do you know how much you would have gained over the past four years if you were out of the market for the 14 best days?

Guess, don't cheat...

Spoiler

Less than 1%

 

[Ted Mullins]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

 

[Juxtatarot]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

I suspect this is used as a lame excuse to spend and not save. Too bad. There was a great opportunity for investors in this demographic to buy in low.

 

[Doctor Detroit]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

A recent study which I cannot link because I forgot what the name of the data collector was, said millennials are more conservative than Gen X and much more than Boomers with investing. That's fine IMO, but I also find the ones I know to be indifferent to retirement savings.

Times are changing, in 1990 60% of Fortune 500 companies offered pensions and now it's closer to 20%. We have to move away from Boomers and make our own world and the markets will reflect the conservative nature of Gen Y, and the anger of Gen X.

As far as not knowing markets and the like: index invest, dollar cost average, and be patient. you don't have to study p/e ratios and know spreadsheets, you just have to track markets. The U.S. stock market will make money over time, that's something I don't see changing. Risk adverse folks should have a balanced approach but people need to be in the game, not on the sidelines.

 

[Doctor Detroit]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

I suspect this is used as a lame excuse to spend and not save. Too bad. There was a great opportunity for investors in this demographic to buy in low.

Not according to data it isn't. Millennials for all their faults are generally pretty thrifty, they just aren't all that adept at investing. They keep a lot of cash around as Mullens infers, so it isn't about them buying hot tubs and Jaguars.

 

[Juxtatarot]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

I suspect this is used as a lame excuse to spend and not save. Too bad. There was a great opportunity for investors in this demographic to buy in low.

Not according to data it isn't. Millennials for all their faults are generally pretty thrifty, they just aren't all that adept at investing. They keep a lot of cash around as Mullens infers, so it isn't about them buying hot tubs and Jaguars.

I'd be interested in seeing this data. I haven't noticed much difference in the savings and credit behaviors of the young over the last few generations.

 

[Doctor Detroit]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

I suspect this is used as a lame excuse to spend and not save. Too bad. There was a great opportunity for investors in this demographic to buy in low.

Not according to data it isn't. Millennials for all their faults are generally pretty thrifty, they just aren't all that adept at investing. They keep a lot of cash around as Mullens infers, so it isn't about them buying hot tubs and Jaguars.

I'd be interested in seeing this data. I haven't noticed much difference in the savings and credit behaviors of the young over the last few generations.

here is some...and here is some more.

There was a really good broad study I heard about but let me find it. I'm gen x and generally I'm fairly aggressive with investing, but not like the boomers were. I think the subsequent generations have learned from the faults of their elders, at least for the most part. Problem is, I don't think we're going to feed the economy down the road like the boomers do now. They are some spending fools.

 

[Ted Mullins]

A lot of my buddies are middle class, late 20s/early 30s and not really doing anything for retirement at all, maybe just enough to get their match at most - the recurring theme I notice is that they are all fully aware of the way the market tanked in 2007-2008 but have little to no clue that they'd have it all back and then some. I'd consider them pretty inept when it comes to the market (I am too) but that seems to be quite common. Seems like the downswing was a much bigger story in the mainstream than the upswing that has followed.

I suspect this is used as a lame excuse to spend and not save. Too bad. There was a great opportunity for investors in this demographic to buy in low.

There's a little bit of this mixed in but IMO that's not really the driving force (speaking strictly for my anecdotal examples) - I'd describe them as somewhat financially careless but far from anything flashy or excessive.

Can't speak for the whole generation, but what Dr Detroit posted jives with what I thought/observed...people that reached investing age during a down economy are scared of the market. Could lead to them investing in a portfolio typical for a 55 year old at 30, or could lead to them thinking they will lose their investments and use it as an excuse to never start like you suggested. I think a lot of "millenials" with basically no financial knowledge perceive the market as a casino for the wealthy and aren't aware that if you have 20, 30, 40 years you can just pour into index funds and are very likely perfectly safe. The best route for the clueless young investor is just so much safer and simpler than most of them realize.

 

[kutta]

A new study shows most middle-class Americans are failing miserably when it comes to preparing for retirement.

The study was full of bad news, including that 34 percent of middle-class Americans aren't contributing anything to a 401(k) or other retirement savings vehicle. Even worse, 41 percent of those 50 to 59 are not currently saving for retirement. Nineteen percent of all respondents have no retirement savings at all.

It appears that procrastination is playing a big role: 55 percent said they plan to save "later" for retirement to make up for not saving enough now.

"Saving for retirement isn't easy," Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, said in a release. "If people in their 20s, 30s and 40s aren't saving today, they are losing the benefit of time compounding the value of their money. That growth can't be made up later, so people have to commit early in life to make savings a regular discipline year after year it is the only way most people will achieve their financial goals to carry them through retirement."

The survey showed that middle-class Americans saved, on average, a total of $20,000, which is down from $25,000 last year. Most expect to need at least $250,000 for retirement but are saving only about $1,500 a year.

About 70 percent said they have a 401(k) plan available to them, and 93 percent currently contribute to that plan. Only 67 percent contribute enough to maximize their company's 401(k) match.

About 58 percent of people without access to a 401(k) plan said it is not possible to pay bills and save for retirement. For those who do have access to a 401(k) plan, only 32 percent said they can't save and pay bills.

About 70 percent of people have no confidence in Social Security being a primary funding source for retirement. Combined with not having enough savings, about one-third say they will need to work until they are 80.

On the first bolded, WTF???? Stock market up more than 13% over the past 4 years, incredible.On the second bolded, WTF? Giving away free money is the biggest mistake I can image financially, the 33% not maxing the match are morons. There is no excuse for that, none.

On the gains over the past four years...do you know how much you would have gained over the past four years if you were out of the market for the 14 best days?

Guess, don't cheat...

Spoiler

Less than 1%

Forget the bolded. Who the heck only needs $250k for retirement?

 

[Doctor Detroit]

A new study shows most middle-class Americans are failing miserably when it comes to preparing for retirement.

The study was full of bad news, including that 34 percent of middle-class Americans aren't contributing anything to a 401(k) or other retirement savings vehicle. Even worse, 41 percent of those 50 to 59 are not currently saving for retirement. Nineteen percent of all respondents have no retirement savings at all.

It appears that procrastination is playing a big role: 55 percent said they plan to save "later" for retirement to make up for not saving enough now.

"Saving for retirement isn't easy," Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, said in a release. "If people in their 20s, 30s and 40s aren't saving today, they are losing the benefit of time compounding the value of their money. That growth can't be made up later, so people have to commit early in life to make savings a regular discipline year after year it is the only way most people will achieve their financial goals to carry them through retirement."

The survey showed that middle-class Americans saved, on average, a total of $20,000, which is down from $25,000 last year. Most expect to need at least $250,000 for retirement but are saving only about $1,500 a year.

About 70 percent said they have a 401(k) plan available to them, and 93 percent currently contribute to that plan. Only 67 percent contribute enough to maximize their company's 401(k) match.

About 58 percent of people without access to a 401(k) plan said it is not possible to pay bills and save for retirement. For those who do have access to a 401(k) plan, only 32 percent said they can't save and pay bills.

About 70 percent of people have no confidence in Social Security being a primary funding source for retirement. Combined with not having enough savings, about one-third say they will need to work until they are 80.

On the first bolded, WTF???? Stock market up more than 13% over the past 4 years, incredible.On the second bolded, WTF? Giving away free money is the biggest mistake I can image financially, the 33% not maxing the match are morons. There is no excuse for that, none.

On the gains over the past four years...do you know how much you would have gained over the past four years if you were out of the market for the 14 best days?

Guess, don't cheat...

Spoiler

Less than 1%

Spoiler

Forget the bolded. Who the heck only needs $250k for retirement?

People retiring in 2005 are probably ok with that.

 

[FUBAR]

A new study shows most middle-class Americans are failing miserably when it comes to preparing for retirement.

The study was full of bad news, including that 34 percent of middle-class Americans aren't contributing anything to a 401(k) or other retirement savings vehicle. Even worse, 41 percent of those 50 to 59 are not currently saving for retirement. Nineteen percent of all respondents have no retirement savings at all.

It appears that procrastination is playing a big role: 55 percent said they plan to save "later" for retirement to make up for not saving enough now.

"Saving for retirement isn't easy," Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, said in a release. "If people in their 20s, 30s and 40s aren't saving today, they are losing the benefit of time compounding the value of their money. That growth can't be made up later, so people have to commit early in life to make savings a regular discipline year after year it is the only way most people will achieve their financial goals to carry them through retirement."

The survey showed that middle-class Americans saved, on average, a total of $20,000, which is down from $25,000 last year. Most expect to need at least $250,000 for retirement but are saving only about $1,500 a year.

About 70 percent said they have a 401(k) plan available to them, and 93 percent currently contribute to that plan. Only 67 percent contribute enough to maximize their company's 401(k) match.

About 58 percent of people without access to a 401(k) plan said it is not possible to pay bills and save for retirement. For those who do have access to a 401(k) plan, only 32 percent said they can't save and pay bills.

About 70 percent of people have no confidence in Social Security being a primary funding source for retirement. Combined with not having enough savings, about one-third say they will need to work until they are 80.

On the first bolded, WTF???? Stock market up more than 13% over the past 4 years, incredible.On the second bolded, WTF? Giving away free money is the biggest mistake I can image financially, the 33% not maxing the match are morons. There is no excuse for that, none.

On the gains over the past four years...do you know how much you would have gained over the past four years if you were out of the market for the 14 best days?

Guess, don't cheat...

Spoiler

Less than 1%

Spoiler

Forget the bolded. Who the heck only needs $250k for retirement?

people who are bad at math

people who expect to live one year

people who expect their kids to take care of them

people who retired in 1964

 

[Sand]

A new study shows most middle-class Americans are failing miserably when it comes to preparing for retirement.

The study was full of bad news, including that 34 percent of middle-class Americans aren't contributing anything to a 401(k) or other retirement savings vehicle. Even worse, 41 percent of those 50 to 59 are not currently saving for retirement. Nineteen percent of all respondents have no retirement savings at all.

It appears that procrastination is playing a big role: 55 percent said they plan to save "later" for retirement to make up for not saving enough now.

"Saving for retirement isn't easy," Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, said in a release. "If people in their 20s, 30s and 40s aren't saving today, they are losing the benefit of time compounding the value of their money. That growth can't be made up later, so people have to commit early in life to make savings a regular discipline year after year it is the only way most people will achieve their financial goals to carry them through retirement."

The survey showed that middle-class Americans saved, on average, a total of $20,000, which is down from $25,000 last year. Most expect to need at least $250,000 for retirement but are saving only about $1,500 a year.

About 70 percent said they have a 401(k) plan available to them, and 93 percent currently contribute to that plan. Only 67 percent contribute enough to maximize their company's 401(k) match.

About 58 percent of people without access to a 401(k) plan said it is not possible to pay bills and save for retirement. For those who do have access to a 401(k) plan, only 32 percent said they can't save and pay bills.

About 70 percent of people have no confidence in Social Security being a primary funding source for retirement. Combined with not having enough savings, about one-third say they will need to work until they are 80.

On the first bolded, WTF???? Stock market up more than 13% over the past 4 years, incredible.On the second bolded, WTF? Giving away free money is the biggest mistake I can image financially, the 33% not maxing the match are morons. There is no excuse for that, none.

On the gains over the past four years...do you know how much you would have gained over the past four years if you were out of the market for the 14 best days?

Guess, don't cheat...

Spoiler

Less than 1%

Spoiler

Forget the bolded. Who the heck only needs $250k for retirement?

Spoiler

people who are bad at math

people who expect to live one year

people who expect their kids to take care of them

people who retired in 1964

But it would be one hell of a year.

 

[Doctor Detroit]

Millennials and retirement

Some decent macro stuff in there.

 

[Random]

How much is too much to have in a HSA? Ours is through a credit union, without investment options. We get about 1% on the balance. Our max out of pocket $5K/yr. At what point should I stop contributing to this account and invest that money in Roth/401K?

 

[Sand]

How much is too much to have in a HSA? Ours is through a credit union, without investment options. We get about 1% on the balance. Our max out of pocket $5K/yr. At what point should I stop contributing to this account and invest that money in Roth/401K?

With no investment options I'd cap it at 5k. If you had investment options the sky is the limit. HSAs are an incredible vehicle if you don't need the money - the only one where it can be tax free going in and out(bonanza!).

 

[Dentist]

How much is too much to have in a HSA? Ours is through a credit union, without investment options. We get about 1% on the balance. Our max out of pocket $5K/yr. At what point should I stop contributing to this account and invest that money in Roth/401K?

I personally think that having 2.5 years of deductibles is the correct choice.

You want to have money for that armageddon situation... emergency situation in December, then another situation in January when it's new deductible time and then a little left over.

I'm still working on getting up to 2.5 years because I'm always spending some money from the account, but that's the point at which I would either quit, or open a 2nd account at somewhere like BAnk of AMerica HSA or HSA bank

 

[Steve Tasker]

While we're on the topic of HSAs, can someone educate me on the transferability of the accounts? I'm usually pretty good on the concepts of rollovers, conversions, etc....kinda comes with the territory as a "tax guy", but I'm pretty woefully uneducated on HSAs. I have an HSA at work. I contribute a portion of my weekly paycheck, but nowhere near the annual contribution cap. Over the years, it's accumulated a bit to where I now have a few grand in the account. Nothing big, but it does actually approximate the (2.5 x annual HDHP deductible) amount that Dentist notes above.

My problem: the investment choices suck. The only option with this place is a basic interest-bearing account, which has an interest rate of something absurdly low. I'm not looking to take chances to find a big yield in my HSA, but I'm not even beating inflation at this point. I'd like to invest in something a little better for my money.

Is it possible to do a "rollover" into something better? Or am I locked into this bank because it's through my employer? Thinking of it from a 401(k) point of view, I wouldn't be able to rollover a 401(k) into an IRA without terminating employment (which I don't plan to do)....are HSA's treated the same way? Or can I maybe move a large portion of the HSA to a more advantageous bank and continue having my weekly contributions go into the original account through my work payroll deductions?

 

[Tiger Fan]

Millennials and retirement

Some decent macro stuff in there.

Good posting

loved the quote about "money allows you to follow your passions"

 

[FUBAR]

I've asked this before elsewhere, but curious to see what others think.

Background:

I'm 5 or slightly more years away from first retirement, but I'll get another job at that point. Don't know what that will be.

We have a good amount saved/invested and unless something highly unexpected happens, we'll get a nice pension - enough to cover most of our expenses other than a mortgage.

We only have $40k saved for a down payment on a home right now, expect this to be less than 10%. We could qualify for VA loan but those rates generally aren't good.

Been putting away 5k in each of our Roths each year along with 10% in the TSP and 2k in each of our kids college accounts. They're 3-12, so there's some time there but the oldest may start college soon after I retire. Don't expect much in scholarships for him unless he gets his #### together, but his younger brother is on the right track right now (granted, he's in 4th grade). I don't plan on adding much to their accounts the next few years.

Question:

How much would you start putting into the house fund at the expense of retirement funds? We could just wait until 2018 to start the house fund and go all-in for a year to two years to get us to 30%. Is this the smart move? Or is it better to put a five thousand each year in the more conservative house fund?

 

[Slapdash]

How much is too much to have in a HSA? Ours is through a credit union, without investment options. We get about 1% on the balance. Our max out of pocket $5K/yr. At what point should I stop contributing to this account and invest that money in Roth/401K?

Really no limit for what I would put in an HSA, but I can invest mine. Also, my fiancee has a serious long term health issue. I'm hoping to save up a lot during my younger years on a high-dedcutable plan that we can spend on her when both of us or just her are able to retire early.