Saving for the future.

[amalik]

Actually, much better than that: 10.92% annualized return (noted on the right side of the image). Remember, the $180,000 was invested monthly over the entire 10-yr period, not a big chunk at the beginning.

Conversely, here's another 10-yr hypothetical with the same fund; this time it starts on 1/1/1999 and ends on 1/1/2009. Quite the difference. The $180,000 turns into ~$155,000. Ouch. Sometimes timing sucks.

Very interesting. Thanks for the data points. Is this tool accessible by anyone?

I bet if they left it alone a few more years... they'd be OK but... imagine on that day in 2009 you are 65 and need to retire.

I guess that is why we heard of stories in 2008 and such about people 'pushing out' retirement another 5 years for example.

Probably trying to wait for the losses to swing positive.

On the flip side, it would be interesting to see a few 30 year runs, if you can do one for me. I assume that's how long most people do a 401k or Roth.

You aren't totally wasting your time. I may end up considering a 401k after this

 

[CXS]

Did your portfolio have to 'recover' from the 07-08 mess?

We were very, very lucky when that happened. We decided to change investment companies and our funds were divested into a cash only account for transfer. Coincidentally the transfers were complete when the market crashed so we didn't lose a penny.

Simple dumb luck saved us.

 

[B33R_Runner]

Very interesting. Thanks for the data points. Is this tool accessible by anyone?

I bet if they left it alone a few more years... they'd be OK but... imagine on that day in 2009 you are 65 and need to retire.

I guess that is why we heard of stories in 2008 and such about people 'pushing out' retirement another 5 years for example.

Probably trying to wait for the losses to swing positive.

On the flip side, it would be interesting to see a few 30 year runs, if you can do one for me. I assume that's how long most people do a 401k or Roth.

You aren't totally wasting your time. I may end up considering a 401k after this

I believe Morningstar has a web-based program in which you can run hypotheticals like these. Looks like you can subscribe for free for two weeks:
https://www.morningstar.com/

There are also free online calculators out there that I like to play with. You can't use specific investments, but they are still very useful: Financial Calculators


Here's $458 invested monthly (~$5,500/yr, the current annual IRA contribution limit) in the S&P 500 over a trailing 30-yr period.

 

[AKmoney]

i also have an REI visa that i used to use for work purchases. my employer reimbursed all my gas purcahses and any home depot or paint store purchases i made, so i would rack up my REI dividend on the company's dime. i got a ~$190 dividend last year just from work expense reimbursements. i put that one away in exchange for the southwest card, though and don't have that job anymore :\

I used to have other points cards including a couple airline milesage cards but in the end I got rid of them all. I got tired of all the restrictions - just gimme the cash, plz. The downside to the cash rewards cards is they generally have a VERY high interest rate so they only make sense for folks who can pay it off on a monthly basis. This being said, the cash back is significant. I put EVERYTHING on my card: gas, groceries, cell phone bill, cable bill, gym membership, hell even California lets you renew your DMV using a credit card without an additional fee.

Cards like the REI and/or Southwest airlines cards are interesting but in the end you can only use the benefits at those locations.

 

[AKmoney]

I like to use spreadsheets (Excel or Google Sheets) to map out long-term investment returns. I have multiple accounts (401k, Roth IRA, employee pension, cash/taxable) so I create entries in the spreadsheet for each of them which makes it easy to sum them all up and to get an idea of what everything will be worth 10 or 20 years from now. I've also used it to make "burn-down" charts where I can estimate how many years' worth of cash I have after I retire before I hit rock bottom.

Become familiar with how the PMT, PPMT and IPMT formulas work. You can also use these to map out home mortgages as well and to see how much sooner you can pay something off should you change interest rates and/or make additional monthly payments on top of the minimum.

Also, for the truly dedicated, I recommend taking an online Finance course through something like Udemy or Coursera. It's really, seriously useful sh*t, the kind of stuff they should be drilling into kids' heads in high school before they sign up for $200K in loans to earn an underwater basket weaving degree from some east coast liberal arts college.

Note: I'm an engineer so my idea of fun sometimes involves chugging a Sculpin IPA while playing around with spreadsheets. It's not for everyone.

 

[AKmoney]

Actually, much better than that: 10.92% annualized return (noted on the right side of the image). Remember, the $180,000 was invested monthly over the entire 10-yr period, not a big chunk at the beginning.

Conversely, here's another 10-yr hypothetical with the same fund; this time it starts on 1/1/1999 and ends on 1/1/2009. Quite the difference. The $180,000 turns into ~$155,000. Ouch. Sometimes timing sucks.

The good news is that even in this worst-case scenario, the investor is almost certainly not doomed to the local homeless shelter. They'll be making regularly-scheduled withdrawals/distributions in relatively small amounts, not some $155K lump sum all at once. The account would have recovered somewhat as the market made really nice gains from 2010-2015.

 

[cwmpryddig]

saving up is not a big issue for me, cause i don't need much. i'm not used to partying and wasting money like a madman. i'd rather go travelling or buy something worthy and really valuable

 

[Dorobuta]

Just met with our financial advisor - could retire today if I wanted. We are in good shape.

 

[CXS]

Good for you! You going to go for it or do you enjoy your job?

 

[Dorobuta]

Good for you! You going to go for it or do you enjoy your job?

going to continue for between 2 and 5 years, depending on what happens with healthcare, etc.

but then again, if things turn bad at work, I have options.

good place to be, takes a huge load off of things.

 

[AKmoney]

In light of my post to the "Have you ever been laid off?" thread, I figured I'd resurrect this one. Saving for the future also means being able to ride out an unexpected loss of income.

The last time we posted to this thread, Trump was just elected. We've had a great run in the market since then, especially in international stocks. Now I know why Betterment invested in them - they may have done nothing from 2015-2016, but they're up 20% thus far in 2017. You never know when (or why) this stuff will make a run.

Speaking of Betterment, I dumped them. They increased their management fees unexpectedly. I'm back to using Scottrade again. The guy in the local office gave me a transfer bonus and a years' worth of free trades so why not? I continue to buy small chunks of Vanguard index ETFs just like Betterment did, only now I do so on my own and without paying any fees.

 

[Watchdogg]

Didn't get to respond to last thread. Was laid off July 2016. 32 years with them. 5000 workers lost jobs. Company moved everything overseas. Have 401k through Fidelity that is still making 12%. I let them manage it. A lot of guys I worked with were doing their own thing and couldn't keep up with what I was making. The market is definately on a run. Eventually I'll roll it over to something else. But with that amount of return I just can't move it just yet.

 

[wadle5]

In light of my post to the "Have you ever been laid off?" thread, I figured I'd resurrect this one. Saving for the future also means being able to ride out an unexpected loss of income.

The last time we posted to this thread, Trump was just elected. We've had a great run in the market since then, especially in international stocks. Now I know why Betterment invested in them - they may have done nothing from 2015-2016, but they're up 20% thus far in 2017. You never know when (or why) this stuff will make a run.

Speaking of Betterment, I dumped them. They increased their management fees unexpectedly. I'm back to using Scottrade again. The guy in the local office gave me a transfer bonus and a years' worth of free trades so why not? I continue to buy small chunks of Vanguard index ETFs just like Betterment did, only now I do so on my own and without paying any fees.

You know I would highly recommend looking into Charles Schwabb robo advisor. I work in the financial industry and have seen several great products, but the reality is fees will get you. The benefit of the Schwabb account is no fees. As for Scottrade, what is going to happen with your local representative with the buyout? Will they still be there just under the TD Ameritrade or is your local rep just trying to put money in their own pocket quickly before he is out of a job. Just something to look into as a close colleague of mine also works for scottrade and basically said when the acquisition occurs a lot of them may be without jobs.

Didn't get to respond to last thread. Was laid off July 2016. 32 years with them. 5000 workers lost jobs. Company moved everything overseas. Have 401k through Fidelity that is still making 12%. I let them manage it. A lot of guys I worked with were doing their own thing and couldn't keep up with what I was making. The market is definately on a run. Eventually I'll roll it over to something else. But with that amount of return I just can't move it just yet.

While 12% is great with what this market has done these past few quarters I wonder how much Fidelity is taking from you? I will say it is on a run, and at what point is the tipping point? When the market drops 10%, and then takes you a few days to get everything moved out? just thinking from a more conservative approach and depending on your age and how close you are to retirement you may want to possibly start moving parts of it now. Again possibly.

 

[ran]

In my mid 40's I was down about being single and without a house of my own. I knew enough about retirement, that I went ahead and maxed out my 401k. I had no debts and a company car. surprise, I got married 50. (you should have seen me with the Loan Officer, I didn't want to disclose my financial holdings to him or my new wife.) 2008? that ate up a good chuck of my IRAs. I was old-school, believed it would come back. By the time it did, I was 59 1/2 and drawing off of some of those funds. Looking back would I do anything different? maybe invest in more silver and gold. (in my 40's I was investing like I was in my 20's--stock funds.)
___________________
2007 SE V6 Titanium

 

[CXS]

You know I would highly recommend looking into Charles Schwabb robo advisor. I work in the financial industry and have seen several great products, but the reality is fees will get you. The benefit of the Schwabb account is no fees. As for Scottrade, what is going to happen with your local representative with the buyout? Will they still be there just under the TD Ameritrade or is your local rep just trying to put money in their own pocket quickly before he is out of a job. Just something to look into as a close colleague of mine also works for scottrade and basically said when the acquisition occurs a lot of them may be without jobs.

While 12% is great with what this market has done these past few quarters I wonder how much Fidelity is taking from you? I will say it is on a run, and at what point is the tipping point? When the market drops 10%, and then takes you a few days to get everything moved out? just thinking from a more conservative approach and depending on your age and how close you are to retirement you may want to possibly start moving parts of it now. Again possibly.

As a retired guy this market spooks me a bit. The run we're in right now is great but it's not going to last. Sometime we'll have a correction/crash depending on too many factors to list. I've made my own decisions on investments and finally decided I was better off letting someone else do it for me. I didn't do that well and the pros can do much better.

I switched to Vanguard a while back and am very pleased with our advisor and our performance. Knock on wood. Funny thing about Fidelity is they were the company we used prior to the crash and who was so slow in honoring our moving to another company. Their slow speed saved us in that case but I really don't have any interest in trusting someone that slow.

When the sh!t hits the fan you want someone who can act quickly. That's not my view of Fidelity. It's been quite a while since I left Fidelity but they made a small error leaving me with 29¢ in our account. So ever since the crash I get quarterly statements showing I have 29¢. The postage for that statement is 58¢, kind of makes a guy wonder why they haven't closed my account down in all these years.

I would think they must have some program searching these low balance accounts that cost them a couple dollars every year. I wish I knew how many folks like us are overlooked and how much they're giving away every year. Not exactly wise on their part.

 

[wadle5]

As a retired guy this market spooks me a bit. The run we're in right now is great but it's not going to last. Sometime we'll have a correction/crash depending on too many factors to list. I've made my own decisions on investments and finally decided I was better off letting someone else do it for me. I didn't do that well and the pros can do much better.

I switched to Vanguard a while back and am very pleased with our advisor and our performance. Knock on wood. Funny thing about Fidelity is they were the company we used prior to the crash and who was so slow in honoring our moving to another company. Their slow speed saved us in that case but I really don't have any interest in trusting someone that slow.

When the sh!t hits the fan you want someone who can act quickly. That's not my view of Fidelity. It's been quite a while since I left Fidelity but they made a small error leaving me with 29¢ in our account. So ever since the crash I get quarterly statements showing I have 29¢. The postage for that statement is 58¢, kind of makes a guy wonder why they haven't closed my account down in all these years.

I would think they must have some program searching these low balance accounts that cost them a couple dollars every year. I wish I knew how many folks like us are overlooked and how much they're giving away every year. Not exactly wise on their part.

Oh you are absolutely right. We are way overdue for a correction and when it occurs it definitely will be worse than 08. I just figured as a retired guy how much movement should you really be making with active trades etc. Glad to hear about vanguard, but they are in one way you get what you pay for. They are absolutely some of the cheapest out there you can buy, but that is also reflected in their return. I'm by no means saying jump ship and Vanguard is the devil, but there are other managed options that may fit you better.

Again I agree the fact that Fidelity wasn't quick to jump and by dumb luck saved you some serious coin is awesome. And this is why I like the robo account, because anytime I want to move or withdrawal money it happens that day. Not having to worry about human error or me not being the advisors biggest account and being put on the back burner is what made me move.

They usually sweep those accounts after inactivity for a few years. It's funny you mention that because I just got a notice for an old ING account(READ no longer a company now VOYA). I had $7 in that account and they hadn't mailed me a statement in 5 years. Got a letter last month stating with no activity they will close it. Checked the statement and the guaranteed interest on this account was amazing. The very next day I transferred a chunk of money into it just to let it earn that higher guaranteed rate. I would think for that reason is why they may not send you a letter to close right away, as for some it reminds you of old accounts from Highschool that you thought you closed and actually have a better rate than anything right now.

Congrats on retirement though and surviving 2008. What most people saw who did get hit, they didn't get back to breaking even or the dollar amount prior to 08 crash for about another depending on their investment style for another 5-8 years. Again by no means knocking your choice, I just figured if you had some free time to maybe look at some other options or even maybe diversifying a bit outside of what you are currently in. nothing ever hurt the person who spread his wealth out over several locations.

 

[AKmoney]

You know I would highly recommend looking into Charles Schwabb robo advisor. I work in the financial industry and have seen several great products, but the reality is fees will get you. The benefit of the Schwabb account is no fees. As for Scottrade, what is going to happen with your local representative with the buyout? Will they still be there just under the TD Ameritrade or is your local rep just trying to put money in their own pocket quickly before he is out of a job. Just something to look into as a close colleague of mine also works for scottrade and basically said when the acquisition occurs a lot of them may be without jobs.

I'm fortunate enough to live in an area that's got Scottrade, TD Ameritrade, Fidelity and Schwab branches all within a 10 minute drive. When Scottrade gets swallowed up by TD, I may do nothing. TD Ameritrade has a large list of commission-free ETFs, many of which are the same Vanguard ETFs I like to buy now.

TD, Schwab and Fidelity all offer a selection of low-cost, commission-free index ETFs which are good for constructing a balanced, diversified investment portfolio.

I also have a Roth IRA that's presently with Scottrade. I'm most likely going to move it to Fidelity because I recently learned that I can do something called aMega Back Door Roth IRA contribution. My employer 401k is also with Fidelity, so having the Roth IRA at the same place makes it super easy to perform in-service rollovers of after-tax 401k contributions into a Roth IRA.

 

[AKmoney]

As a retired guy this market spooks me a bit. The run we're in right now is great but it's not going to last. Sometime we'll have a correction/crash depending on too many factors to list. I've made my own decisions on investments and finally decided I was better off letting someone else do it for me. I didn't do that well and the pros can do much better.

I agree that at some point, we're going to have a correction, if not a crash. Everything is cyclical. For someone in retirement, the main thing you can do is adjust your asset allocation to a more conservative position, say, for example, 50/50 stocks/bonds. For a working stiff like me with 15+ years left to go, I'm holding at 80/20. I'll tank if there's a market tank, but I've also got plenty of time left to recover.

I switched to Vanguard a while back and am very pleased with our advisor and our performance. Knock on wood. Funny thing about Fidelity is they were the company we used prior to the crash and who was so slow in honoring our moving to another company. Their slow speed saved us in that case but I really don't have any interest in trusting someone that slow.

Vanguard has excellent funds; arguably the best ones out there. It's not really necessary to sign up for their "robo" or advisory service, however. It's not hard to manage things on your own and save the extra 0.3% per year (or whatever it is they charge).

When the sh!t hits the fan you want someone who can act quickly. That's not my view of Fidelity. It's been quite a while since I left Fidelity but they made a small error leaving me with 29¢ in our account.

Funny thing about Fidelity- I recently had them move a bunch of cash around between a 401k and a Rollover IRA. I had about $20K in a Rollover account there for literally 24 hours before I rolled it all out to another account, and a few days later they deposited $0.09 into the account. It was interest earned! Now I have to have them cut me a check to zero it out again - and pay taxes and early withdrawal penalties on the $0.09

 

[Muzzle of Bees]

I am not ever playing that game again. To me it seems like sanctioned organized crime. My backup plan is that I have some ideas I should be able to bring to market and benefit from. I have not had time to pursue them while doing my regular day job. Eventually I will give them a try though.
My primary plan is to collect my annuity from my current job.

 

[wadle5]

I am not ever playing that game again. To me it seems like sanctioned organized crime. My backup plan is that I have some ideas I should be able to bring to market and benefit from. I have not had time to pursue them while doing my regular day job. Eventually I will give them a try though.
My primary plan is to collect my annuity from my current job.

Whats your annuity? Whats the payout, what happens if the company goes under? Your primary plan should not be relying solely on someone else?