Saving for retirement thread, jesus christ is this shit really as complicated as it sounds (talking as a U.S.er)

Why is it so hard to think about (the best way of) saving for retirement?
Is it because it's not like emergency funds where you can just say 'money goes here' and never think about it beyond that (sure some would argue I'm doing it wrong even doing that)?
There are like 3-5 (more? fewer?) main type of tax deferred accounts. I wish I could formulate a better question here but all I got is "huh?" Not even sure I know how taxes work tbh. Why when I even hear "403(b)" does my brain start shutting down?
I took enough 'algebra for people with brain shutdown issues' classes in college to know about the ~*~magic of compound interest~*~ so save early and save often, that part I get. But then there's so goddamn many options, blargh

Inspired by reading this bittersweet NYT piece http://www.nytimes.com/2012/07/22/opinion/sunday/our-ridiculous-approach-to-retirement.html?_r=1

suitcase under the bed ftw

"dying early is not the basis of a retirement plan."

;_;

I think what everyone wants is to just have someone come along and say "just do this, this, and this" but not have to pay that person. Ha!
I tried talking to my dad about this last night. He's an accountant. He told me not to worry about it which is like the worst advice ever? He has no retirement savings.

Like are there any good books on this that will solve some of my problems or make me feel less stupid? They can be condescending as they want, I don't even care. I need retirement savings info in baby food form shoved into my mouth with a little rubber-coated spoon.

i like thebillfold.com, they say Roth IRA is the way to go
http://thebillfold.com/2012/03/what-you-need-to-know-about-traditional-and-roth-iras/

they also recomend this book, which i want to read
http://thebillfold.com/review/i-will-teach-you-to-be-rich-by-ramit-sethi/

I think the number of kinds of accounts is the least of our problems. The real issue is that we're basically left to fend for ourselves against wall street/big insurance companies when actually choosing what to invest in WITHIN the plans. We're basically thrown to the wolves imo.

Recently, a number of mutual funds seem to be doing reasonably, again.

The most stable thing I have savings in that actually has earned money the last few years has been US savings bonds that my grandma bought circa 1990ish.

retire in opulence with this 1 weird trick!

if you can spare it, max out your 401k + matching contribution
if you can spare it, max out your roth
put it all in S&P500, set it and forget it

There's some mandatory matching pension w/my new job but idk how much they're pulling out or how to find out.

Yo Abbott, Mr. You-Know-Who-I'm-Talking-About has been dealing with his own pension/savings situation now that he is in retirement and he has concluded that there are about 3 type of plans:

1) too complicated on purpose so you have to hire a financial advisor
2) no risk, tiny tiny tiny growth
3) a complete scam and your company has a life insurance policy out on you anyway

Just don't tie any of your retirement funds to your mortgage or let someone convince you you need to move it around to something else after like 15 years of doing it a certain way cause you take a tax hit every time you move your nest egg.

And I would stick with bonds right now -- mutual funds are still too risky for pension saving purposes IMO in this volatile climate.

W4lt?

indeed.

Yeah that's what that NYT piece is arguing, there should be mandatory professionally managed pensions because DIY style is too crazy.

Not yet convinced that failure is baked into the voluntary, self-directed, commercially run retirement plans system? Consider what would have to happen for it to work for you. First, figure out when you and your spouse will be laid off or be too sick to work. Second, figure out when you will die. Third, understand that you need to save 7 percent of every dollar you earn. (Didn’t start doing that when you were 25 and you are 55 now? Just save 30 percent of every dollar.) Fourth, earn at least 3 percent above inflation on your investments, every year. (Easy. Just find the best funds for the lowest price and have them optimally allocated.) Fifth, do not withdraw any funds when you lose your job, have a health problem, get divorced, buy a house or send a kid to college. Sixth, time your retirement account withdrawals so the last cent is spent the day you die.

^^^ rofl

Prowling around on goodreads/library online catalog, this came up as a good book for beginners who don't understand one lick, though it is the ugliest fucking book

http://www.coverbrowser.com/image/bestsellers-2006/3028-1.jpg

I reserved it from the library, and mizzell's rec, even thought the title gives me the fucking creeps. It's been a hard lesson of adult life not to let narrow aesthetics get in the way of learning and growing; it helps if I can give myself a brief time out to be revolted.

Everything about the idea of being "rich" disgusts me but I do want to be able to live independently and be cushioned from the big blows of life, you know? Why are so many of these books like ***the seductive money blowjob***

I tried to be a bit proactive with my 401k a year or two back, like hrm maybe I should be doing 'things', yknow, like grownups do. So I scheduled a phone appointment with the nice man, and he basically said you're fine don't do anything.

I kind of wanted to cry 'BUT I STILL DON'T UNDERSTAND HOW DO BE A GROWNUP! YOU'RE SUPPOSED TO TEACH ME!'

so I'm still living here in fiddle dee dee land. I wholly sympathize with u, abbbottt

yeah, I'm gonna have a million dollars saved at 68, suuuuure.

schwab has a bunch of helpful short articles on their site - as d.i.y. investing is kinda their thing.

no time like the present to start building your solid gold swimming pool morbs -- you'll need somewhere to store all that MONNAY

abbs - do you pay into social security or do you belong to a separate teachers' pension system?

if you can spare it, max out your 401k + matching contribution
if you can spare it, max out your roth
put it all in S&P500, set it and forget it

― Philip Nunez, Monday, July 23, 2012 5:39 PM Bookmark Flag Post Permalink

This is probably the best advice you can get without getting a lot, lot more complicated, and it'll probably be diminishing returns on the additional stuff you try to learn, in fact it might just confuse you and make things worse. Even if the S&P is "volatile" right now or possibly poised for a drop (which no one knows), as long as you're putting money in at steady intervals, you're probably going to average out ok. Most people on this board aren't retiring for a very, very long time so you can ride out the bumps. A 60-year-old would probably not want to put everything in stock indexes, but a 35-year-old certainly can.

first off, you should pay off debts that have high interest rates, like, everything but student loans at really really low levels.

also, not everyone has 401k accounts, but a 403b is the gov't/non-profit equivalent.
for some people a traditional IRA is more beneficial than a ROTH
index funds are good, look for ones that have low fees that have stocks that pay reliable dividends

abbs - do you pay into social security or do you belong to a separate teachers' pension system?

― sarahell, Monday, July 23, 2012 6:28 PM (52 minutes ago)

I think...both?
403(b) and 457 plan were other options in my benefits package but no matching on those. Also idl what they are.

There is defs a pension system w/matching, idk if social security is a thing or not.

If you get a W2, there's a box that shows you how much you've paid into social security.

most index funds require a minimum investment of around ~3k fwiw

the rule of thumb i always head is the percentage of yr retirement funds you should put in bonds should be equivalent to your age, so that as you grow old your money gets more secure

my current 401k doesn't send me paper-mail updates. So I have no idea how much is in there or what it's doing.

I have it only so when Road Warrior times come, I can say to my sister "I had one, it's gone, here I come to your basement."

Okay, so I don't have anything saved for retirement. But if I do ~ 31 years under the MA public school retirement plan I'll be able to take 80% of my final year salary for life. Now, is it also a good idea to pay into a Roth IRA as well? (My employer would not match funds...)

OK, is this article bullshit or not? Did not see the PBS show....

http://wallstreetonparade.com/2013/04/pbs-drops-another-bombshell-wall-street-is-gobbling-up-two-thirds-of-your-401k/

There's a new Frontline abt the hidden fees of retirement accts -- will watch!!

That's the show being written about there?

Yeah I think so.

hi excuse me does anyone know anything abt retirement plans???

Does your employer offer a 401k matching plan? If not I'd get a traditional or Roth IRA account with someone. My buddy swears by Vanguard but I'd look around to see who charges the least amount of "maintenance" fees and just steadily contribute a percentage of your paycheck to a S&P index fund or something.

^ Not a financial planner, btw :)

I have a massive, probably slightly irrational, fear of being poor when I hit retirement age. I'm constantly worried that the % I contribute won't be enough to cover me.

if i didn't have family i wd be fuct from now til the grave.

Does your employer offer a 401k matching plan? If not I'd get a traditional or Roth IRA account with someone. My buddy swears by Vanguard but I'd look around to see who charges the least amount of "maintenance" fees and just steadily contribute a percentage of your paycheck to a S&P index fund or something.

― Rod Steel (musicfanatic), Wednesday, May 10, 2017 4:34 PM (twenty minutes ago) Bookmark Flag Post Permalink

this is good advice. if your employer offers a 401k, at minimum contribute up to whatever they'll match.

Vanguard is the standard for the Trad/ROTH IRA and low-fee iNdex funds. They invented the damn things.

Traditional IRA: tax-deductable contributions up to 5500 USD/year
ROTH IRA: Taxed at contribution (5500 USD/year) but TAX FREE upon withdrawl.

The idea of a traditional IRA is that you'll be in a lower tax bracket at retirement so taxes won't matter as much.

You put your money into your IRA and use that money to buy stocks/funds/bonds/etc.

401K thru employer is only as good as the matching contributions. If they don't match your contributions you're better off going w/ an IRA outside of whatever your employer is offering as 401K often have inferior products when compared to someplace like Vanguard. People speak highly of Vanguard; i'm w/ Fidelity because I fell victim to marketing, but the fees aren't a big deal for me because I don't make a lot of trades.

I started mine when I was 26 or 27 and SHOULD HAVE STARTED EARLIER! It's never too late though. I have a traditonal IRA because the tax deduction is useful for me as someone who is self-employed. I have had my IRA thru the financial crisis and have seen it rebound in a satisfactory way because I was continuing to contribute the whole time (and buying into low-cost index funds all the while). As the market rose so did those funds. If there's another crisis it will all drop again. Rinse/repeat. There are tools online that let you put stop-loss brakes on your investments so they automatically sell if they drop to a certain threshold.

I've screwed around with individual stocks at times, typically after a big correction and strictly for my own amusement. Legit consumer-financial advisors say you should NOT buy individual stocks because of volatility. I have bought stocks (again, for my own amusement) and had the company go bankrupt and wipe that money off my board. I'm not dealing in dollar amounts that add up to more than a long weekend of food & drink, or a weekend in Vegas (?!) but you still feel like a schnook when it happens.

...and re: it being scary

It's kinda scary! You're taking money you could use NOW and putting it in a place that you CAN'T access for a time in the FUTURE that is distant and vague. I don't know if it's comforting or not but I decided a while ago that,

1) I'm gambling on the continued success of the United States Government

2) If the USGVT continues as planned and our current form of capitalism continues in a recognisable form all will be well

3) If something happens to the USGVT or our current form of capitalism fails then we have bigger problems and NONE of us will be retiring because the world as it exists will be so fundamentally different that planning for it is kinda useless.

ok wait I didn't even ask my question yet!

I have a couple thou from my last job's 401k that got rolled over into an IRA that is all in a money market account

I just enrolled in my employer's 403b (Vanguard!) -- should I roll all of this dumb money market IRA into it? The answer is yes, right?

sounds like it

oh i see! 45:33 which apparently they split into tracks on the Live @ MSG release (which I never realized)

I've got a Roth IRA; a minor sum gets deducted every month and invested in low risk stock, low risk enough that during the financial meltdown the impact was minimal.

yeah i'd roll it and consolidate

Consolidate

lmao whoops i meant to past that last message go the LCD thread!

ok good that seems to be the most sensible bcz I"m sure the interest rate on this Schwab money mkt acct is like 0.04

2nd question: there are like 50 different ways to invest this money! I went with a totally hands-off plan where Vanguard calculates what to invest everything in based on my target retirement date. As someone with zero knowledge of stocks & bonds & shit, is this okay enough? Or could I get significantly more in the long run with minimal effort and engagement?

Yeah that's probably fine. Again, vanguard invented a lot of this stuff. It's probably mostly Index funds that will gradually increase to bonds (more stable) from stocks as the fund ages