I've always proceeded from do not rely on Social Security for retirement. So I've put away money on my own, and my employer matched much of that.

Of course, that sort of thinking/doing places me in the 1%. Oh, well.

Darth, take comfort in this: you have company among the world's greatest.

Each, even musicians, recognized that in order to perform, you have to practice, and to anticipate.

There are a lot of people who act, daily, as if they were walking at the mall. Beyond the immediate distraction, nothing is important.

Ooh! Look over there!

I've always proceeded from do not rely on Social Security for retirement. So I've put away money on my own, and my employer matched much of that.

So have I. The problem is that once the decision is made to "means test" Social Security, i.e. turn it into welfare, people like us will be punished for our thrift. Again.

Why is the government having anything to do with my retirement. Maybe I want to direct my money to the home we live in so when we are ready we won't have a mortgage. If the government hadn't taken so much from us we could have our house half paid off by now.

I suggest retirement in Mexico, Malaysia, Egypt or whatever other warm, low-cost country appeals to you. You can live well on about $2,000 a month.

"Why is the government having anything to do with my retirement."

Because lots of old people starving out of hand, is bad for business.

My 401K from last company wasn't that large to begin with. In three years it lost about 37% of its value.

I finally said screw it. I cashed it in. Payed off all my credit cards, and used the leftover to buy physical silver bullion and junk coins. I am now buying physical silver bullion every month. I'm at about 3% of my net pay.

I don't know about the long term, but I am now figuring I won't bothering retiring. I'm a techie with a desk job. As long as I keep up my skills up and at some point can find a job that I don't have to drive to every day, I can probably work for a long time.

That is until they get to a point that they change the laws that require people to retire at age 65.

My 401K from last company wasn't that large to begin with. In three years it lost about 37% of its value.

First off - that's awful. And I understand the frustration.

My mother said something similar last night, about people seeing 20% of their retirement funds disappearing overnight. My answer was but here, you're allowed to move your retirement investments at will, and plenty of retirement investment funds offer capital guaranteed options. So you might not make much, but at least what you've accumulated is protected.

No one approaching retirement should be in a growth fund. That's what you do in your 30s and 40s. After that, you protect what you have.

I don't know how 401ks work - do you get to choose how it's invested? Or does your employer do that? Anyway, if your SS contributions had been invested on your behalf you'd have a lot more to play with. Shame that all got spent on other people's unsustainable benefits isn't it?

Until the US transitions to a similar structure, this problem is just going to get bigger and bigger. There is no way on earth that the current obligations, promises, (*ahem*, debts) can be funded. And that's been obvious for 30 years.

I suggest retirement in Mexico, Malaysia, Egypt or whatever other warm, low-cost country appeals to you.

I've thought seriously about it Paul. If I cashed in my house and everything else I could just about get away with it now (at 37). Bali or possibly Fiji would be my choice. Maybe the Philippines. I don't really want to, but as an emergency plan it's pretty good.

Egypt? Someone hasn't been watching the news.

You can live pretty well on $2,000 a month in Iowa, too, and they don’t kidnap people here.

As to 401Ks, you can direct them however you want. But beware the advice you hear from financial “planners” – they are really just salesmen. They spend all their time making sales, not following the markets, and don’t necessarily know any more about wise investing than you do. Mostly they tout the party line fed to them through their corporate marketing materials.

I don’t necessarily agree with investing in risky stuff when you’re young. The salespeople tell you that if you assume more risk you earn higher returns, but they seem to ignore the definition of “risk.” It’s entirely possible you could invest in risky stuff your entire life and lose your shirt. After fourteen years of investing, my lifetime investment gains are only around $6,000, and I had nearly $150K in there at one point. I didn’t sell at the bottom, either. At the bottom, I would have not only lost all my gains, but all of my company matches, too.

In 2008 alone, my nest egg lost 40% of its value when the DOW went from 14K to 7K. When the DOW had recovered to around 13.5K, I fired my financial salesman and cashed most of it out. I paid off my condo, bought a bunch of gold and silver bullion, put enough cash in my checking account to live on for an entire year, and put the rest in a self-managed IRA account. There wasn’t much left by then, but my priorities have changed, and now the DOW is sitting at 11.5K, so I don't regret getting out.

The average person earns around $25K a year – average US household income is around $45K. Unless these people are inheriting a boatload of money, they will never have enough wealth that they can afford to risk ANY of it on high-risk “growth” funds.

This concept of “retirement” is a relatively new one. People think the government is going to allow them to spend the last 25 years of their lives tooling around in a Winnebago, spoiling their grandkids, or just doing a little gardening. The truth is that most people barely scrape by, let alone do they manage to accumulate the kind of wealth it takes to spend 25 years not working. And please realize that there about 7 billion people in the world who are laughing themselves silly at the very idea.

DrMaturin:

So have I. The problem is that once the decision is made to "means test" Social Security, i.e. turn it into welfare, people like us will be punished for our thrift. Again.

Funny how that works. No good deed goes unpunished.

I have to note that your name marks you as a person of high intelligence and refinement. [/no sarc]

I don't know how 401ks work - do you get to choose how it's invested? Or does your employer do that? -- Ltw at November 21, 2011 10:31 PM

The 401K is generally handled by a third party investment house such as Fidelity, Charles Schwab, Vanguard, etc. The investment houses have various packages such as Retirement 2020, Retirement 2030, small cap stocks, large cap stock, healthcare packages, etc. You split a percentage of your investment into a single or multiple packages. The fund manager then works out what to buy.

It is very similar to a mutual fund, just done by the employer's investment firm.

Sounds very similar to our superannuation then Jim, except we can pick the fund manager as well (they have to be an approved superannuation fund, of course).

Originally the employer chose the fund, but about 10 years they rammed through a change so that the employee can tell the employer to direct the money to the fund of your choice.

Some employers weren't happy - they had their own funds set up that owned the company building and leased it back to the company, that sort of stuff. Because the money in the fund and it's investment income has tax concessions applied, this was quite handy for them.

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