401k Shit the Bed?

[fredtoast]

(03-12-2020, 01:48 PM)michaelsean Wrote: Crap I already deleted mine because I wanted to double check something.  

Edit: OK what I was checking, is that SSI is administered but not funded by the Social Security Administration.  It's funded by the general fund.

Rep.  I did not know this.  

I wonder why they call them both "social security"?

[Mike M (the other one)]

(03-13-2020, 10:30 AM)fredtoast Wrote: Rep.  I did not know this.  

I wonder why they call them both "social security"?

No clue why SSI is handled by the SSA. 

The only thing I can think Fred, is that 90% of these Gov agencies were setup initially before the information age. So each one has their responsibility defined and they don't like to share with the others and have established procedures in place on how to request info from each other and don't want to change.

For most of us today, this way of operating has become archaic.
We think it should all fall under one name and then have the individual departments under that one name.  Problem is the Gov is so big, that unifying them will cost a lot and most politicians think short term vs long term.

[Benton]

(03-13-2020, 08:56 AM)michaelsean Wrote: Well there's the company match, and the fact that history says you are wrong.  

History? Like, the Roman Xvki plan of 20 bc?

[*michaelsean*]

(03-13-2020, 12:55 PM)Benton Wrote: History? Like, the Roman Xvki plan of 20 bc?

Well I mean that’s a part of it, but certainly nobody attributes everything to the famed Roman XVKI plan of ‘20. Otherwise known as Vicki 20

[fredtoast]

Here is a question I have.

If every week millions of dollars are withheld from paychecks across the country and invested in the stock market as part of 401K plans then how can the market NOT continually go up?

Seems there is constantly more money going in than coming out.

[*michaelsean*]

(03-13-2020, 02:12 PM)fredtoast Wrote: Here is a question I have.

If every week millions of dollars are withheld from paychecks across the country and invested in the stock market as part of 401K plans then how can the market NOT continually go up?

Seems there is constantly more money going in than coming out.

Top of my head answer. That money isn't necessarily invested immediately.  It just goes into, likely, a mutual fund, and then can be held for cash, used to buy foreign or domestic securities, bonds, and there is always money being taken out of the market.  

[Benton]

(03-13-2020, 01:00 PM)michaelsean Wrote: Well I mean that’s a part of it, but certainly nobody attributes everything to the famed Roman XVKI plan of ‘20. Otherwise known as Vicki 20

Point being, you're talking about 40 yearsof history. There's been three meltdowns resulting in significant losses for even safe bets.

Unless you're planning on working 70 years with hopes there's fewer dips, just buy lottery tickets or bet it all at the track. 

[Benton]

(03-13-2020, 02:12 PM)fredtoast Wrote: Here is a question I have.

If every week millions of dollars are withheld from paychecks across the country and invested in the stock market as part of 401K plans then how can the market NOT continually go up?

Seems there is constantly more money going in than coming out.

Because there's constantly money going out, too. Cashing out, dips, companies closing, etc

[oncemoreuntothejimbreech]

I’m still waiting for my home to reach the same value it had before the housing market crashed over a decade ago.

[Dill]

(03-13-2020, 01:00 PM)michaelsean Wrote: Well I mean that’s a part of it, but certainly nobody attributes everything to the famed Roman XVKI plan of ‘20. Otherwise known as Vicki 20

How did the Romans know it was 20 BC?

[*michaelsean*]

(03-13-2020, 04:17 PM)Dill Wrote: How did the Romans know it was 20 BC?

The prophets. Duh.

[*michaelsean*]

(03-13-2020, 03:21 PM)Benton Wrote: Point being, you're talking about 40 yearsof history. There's been three meltdowns resulting in significant losses for even safe bets.

Unless you're planning on working 70 years with hopes there's fewer dips, just buy lottery tickets or bet it all at the track. 

Nothing at all like that. I hope you don’t cover the market for the paper.

[NATI BENGALS]

(03-12-2020, 09:27 PM)michaelsean Wrote: Wall Street looking out for your best interests? Who told you that was a thing? It’s never been a thing and that’s not the reason people make money in equities

That was in response to your Don’t look at your 401k comment.

I would say that is what the majority of Americans do. Make uneducated retirement investment decisions because a 401k with only specific funds is supposed to be our primary retirement savings vehicle.

It’s like giving Wall Street most of your life savings and hoping they are looking out for your best interest.

And then when you “don’t look” for two weeks 20% of the shit you have worked your whole like for us gone.

My whole point of the thread was to complain about our broke ass retirement system. We need to strengthen social security.

[Goalpost]

(03-14-2020, 01:03 AM)NATI BENGALS Wrote: That was in response to your Don’t look at your 401k comment.

I would say that is what the majority of Americans do. Make uneducated retirement investment decisions because a 401k with only specific funds is supposed to be our primary retirement savings vehicle.

It’s like giving Wall Street most of your life savings and hoping they are looking out for your best interest.

And then when you “don’t look” for two weeks 20% of the shit you have worked your whole like for us gone.

My whole point of the thread was to complain about our broke ass retirement system. We need to strengthen social security.

I kind of think you are overlooking the match part of it.  You cant go to a bank with 6 percent of income, not taxed until later if you want. and the bank gives you a match.  Also, 401K funds have options. You can invest in company stock, Mutual funds, or bonds.  You can just take the income and match and invest in bonds if you want, and feel safer although history shows stocks return better.  What you absolutely should not do is invest too much of your savings in your own company stock.  If something happens to your company, you could not only lose your job, but if the company goes under you lose your savings too...ie Enron employees.

[NATI BENGALS]

(03-14-2020, 09:40 AM)Goalpost Wrote: I kind of think you are overlooking the match part of it.  You cant go to a bank with 6 percent of income, not taxed until later if you want. and the bank gives you a match.  Also, 401K funds have options. You can invest in company stock, Mutual funds, or bonds.  You can just take the income and match and invest in bonds if you want, and feel safer although history shows stocks return better.  What you absolutely should not do is invest too much of your savings in your own company stock.  If something happens to your company, you could not only lose your job, but if the company goes under you lose your savings too...ie Enron employees.

No I'm all about the match. It was a major factor on my last job search. Still doesn't change the fact my 401k is basically like bringing my money to the casino and risking it all. You can lose it all. Think of the match like a casino comp. Thanks for playing.

When the bottom 50% of people own less than 1% of the wealth and we continue to see machines and automation take low skill low wage and good earning middle class jobs... People working, fighting, and scraping  to get by their whole lives to have a decent retirement shouldn't have to worry about having a retirement income that can be wiped out at the drop of a random animal carcass in a distant Chinese market. There has to be more security than that. 

[samhain]

(03-14-2020, 11:36 AM)NATI BENGALS Wrote: No I'm all about the match. It was a major factor on my last job search. Still doesn't change the fact my 401k is basically like bringing my money to the casino and risking it all. You can lose it all. Think of the match like a casino comp. Thanks for playing.

When the bottom 50% of people own less than 1% of the wealth and we continue to see machines and automation take low skill low wage and good earning middle class jobs... People working, fighting, and scraping  to get by their whole lives to have a decent retirement shouldn't have to worry about having a retirement income that can be wiped out at the drop of a random animal carcass in a distant Chinese market. There has to be more security than that. 

Yep.  We're going to learn a lot about this when the boomers pass on and subsequent generations enter their retirement years with zero real retirement outside of maybe a 401K.  The numbers of people who are too old to work and don't have enough to get by will skyrocket.

[*michaelsean*]

(03-14-2020, 11:36 AM)NATI BENGALS Wrote: No I'm all about the match. It was a major factor on my last job search. Still doesn't change the fact my 401k is basically like bringing my money to the casino and risking it all. You can lose it all. Think of the match like a casino comp. Thanks for playing.

When the bottom 50% of people own less than 1% of the wealth and we continue to see machines and automation take low skill low wage and good earning middle class jobs... People working, fighting, and scraping  to get by their whole lives to have a decent retirement shouldn't have to worry about having a retirement income that can be wiped out at the drop of a random animal carcass in a distant Chinese market. There has to be more security than that. 

It's not like a casino at all.  The mutual funds you are in make more money if you make money.  If they do poorly, then people stop investing in them and they go away.  

The reason I said don't look at your 401k, is there's not much you can do about it.There are going to be bad times in the market, and every time we hear this is the big one. You have limited options so there's not a lot you can do day to day.  Your new money is buying the mutual fund at a lower rate which will benefit you when the price goes back up.  It's not as good as the price never dropping, but it helps some.

[6andcounting]

(03-16-2020, 09:44 AM)michaelsean Wrote: It's not like a casino at all.  The mutual funds you are in make more money if you make money.  If they do poorly, then people stop investing in them and they go away.  

The reason I said don't look at your 401k, is there's not much you can do about it.There are going to be bad times in the market, and every time we hear this is the big one. You have limited options so there's not a lot you can do day to day.  Your new money is buying the mutual fund at a lower rate which will benefit you when the price goes back up.  It's not as good as the price never dropping, but it helps some.

I think this thread can spur some good conversation and be used to trade (pun intend) life changing information and advice so I want to bump it back to the to top.

Good advice.  The only time I do anything with my 401k is increasing contributions when I know I'm getting some bigger paychecks or when the market dips. I don't even have to re-balance as I'm 100% into an S&P500 growth fund. I do different things in my IRA to keep my overall retirement balanced; however, only a small portion of my IRA is in an international mutual fund and a balanced US company fund (including some bonds) at this point. I do have a lot of individual stocks, but I'm also far enough away from retirement that if I retire in 35 years and I'd still be too young to collect social security.


Most fund are passively managed and are designed to mimic an index so wouldn't even worry about a fund itself and it's managers doing poorly. It will come down to the overall economy and the performance of the index. The difference between an index's performance and a passively managed fund based on that index is going to be incredibly small. The difference on bigger funds, such as the S&P 500, will be so small the different per $1,000,000 invested per year won't even amount to a penny. FYI, this is known as Alpha when looking at the risk of a fund. Measured between -1.0 and 1.0 the closer a fund is to 0.0 the more closely it mimics the index. Most funds are expected to have a slightly negative alpha to cover the annual expense ratio. 
 

[Goalpost]

I'm retired, so I am no longer adding. I was more into preservation. I moved a 60/40 mutual fund into a 30/70 one. It stopped the free fall and wont rebound as quickly but I slept better at night. I have individual stocks in another account, mostly tech stocks, and they have entirely rebounded. I can always adjust again but the election cycle is upon us as well so I am just kind of sitting and waiting.

[NATI BENGALS]

I did my taxes and put my prior years IRA contribution into my account in March and have been wanting to buy. Looks like I missed the lows but I have no idea. The market is doing just crazy shit that makes no sense to me. Like Friday when the final April unemployment numbers came out at around 20 million people and the market shot up. I can’t wrap my head around it.