Originally Posted by
reefraff
http:///forum/post/2772067
I haven't lost one red cent on my 401K or IRA's. I They are there for retirement and I don't plan on selling them until I do something unusual, like retire
I am already retired but 18 years away from being able to draw on the stuff. Ten years out we will be adjusting the allocation of our investments to more bonds and cash holdings. Every 401K we have ever had allows you to move balances among funds. About 18 months ago we did move around 50K in the wife's 401K into a money market fund. We missed the top but not by much. Just waiting for the bottom now.
Come on. You're saying that your current 401K is perfectly balanced, and you've lost absolutely NOTHING regarding your bottom line? I find that very hard to believe. There's not a fund in any 401K plan that is positive right now. Most funds are losing anywhere between 6% - 21%. There are probably only two or three investment firms that deal with companies to provide employees 401K compensation plans. The most popular being Fidelity. If you use Fidelity like I do, then we have the opportunity to move our investments into the same funds. If you know which plans are making money, PLEASE tell me the names of the funds. I want to get into them. Like I said, unless you have your money 100% in Fixed Mutal Funds, I guarantee you've lost some money in your 401K. As far as IRA's, they are backed by the FDIC, and because of the limited amount you can put into them, of course you won't lose money in them. However, you make far less in interest by sticking all your money into IRA's. That's the point of investing in plans like the 401K. It gives you the opportunity to invest your hard-earned money into various markets PRE-TAX that in turns allows you to make more money for your retirement future. Right now, playing the less aggressive funds, the "safe funds" will ensure the value of your 401K doesn't lose a drammatic amount of money. However, in the long run you have far less money in your 401K fund when you do plan to retire, which is the whole reason for investing in a 401K in the first place.
The goal of investing is to earn enough money so that when you do retire, you have the funds to live the same lifestyle that you currently live while you're working. So if you currently make $40K a year after taxes, and you want to maintain that same income after you quit working (whether it's at 58 or 65), you have to have enough money in your investment account to be able to pay you that $40K until you die. So for the above scenario, if you retired at the normal age of 65, and you were fortunate enough to live until you were 80, you'd need at least $600K in your 401K to maintain that theoretical $40K/year lifestyle. However, that doesn't take into account inflation and the increase of the cost of living. So you'd probably need closer to $800,000 in your account to sustain what you consider is $40K/year in today's money. Yes, you're still earning interest on your money after you retire, but you normally dump your funds into 'fixed assets' that make very small percentages. So if the cost of living is higher that the interest you're earning, you'll need more money in your account. If you play it 'safe' in your 401K all the time, you'll never be able to reach that goal.
So Darth makes some moronic statement that investing in 401K's is like gambling, and you deserve to lose your money if you stick it in there. So please tell me oh wise one, where else do you invest your money so that you can have that golden nest egg for your retirement future? Oh I know! THE REAL ESTATE MARKET!!
