The Retirement Gamble last night on Frontline

[MillCreek]

http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/

I watched this last night and it was very interesting.  There are two key points:  the typical actively-managed retirement mutual fund, over time, does not do better than index funds for the S&P 500 or Russell 1000, and you should choose funds with low expense ratios (fees), since over time, these fees can eat up the majority of your return. 

I just checked, and my retirement plan offers only one index fund: a Vanguard fund that tracks the S&P 500, and I already have 20% of my retirement account in that fund.

[RevDisk]

There are two key points:  the typical actively-managed retirement mutual fund, over time, does not do better than index funds for the S&P 500 or Russell 1000, and you should choose funds with low expense ratios (fees), since over time, these fees can eat up the majority of your return. 

The specific numbers change around, but the overwhelming majority of managed funds underperform the S&P 500 on the long term. How, I have no idea. I put most of my 401k into an S&P index. A smidgen into stable index fund, and a couple bucks thrown into other random funds for entertainment purposes.

[MillCreek]

So I did some more poking around in my retirement plan, and I saw a Vanguard small cap and mid cap index funds.  In comparing rates of return, risk, and fees with my current managed small cap and mid cap funds, there was not a compelling business case to stay with my current funds.  So I just moved those to the Vanguard small and mid cap index funds.

[Lee]

I believe that all of my funds are index funds, divided by small, mid, large cap, and international (Pacific). Also a couple of mixed stock/bond funds and and a Treasury index fund.

[Northwoods]

I just looked at >5 year returns and picked the 2 highest from the options.  Fidelty Contrafund and JP Morgan International Fund.  My matching all goes into PACCAR common stock.  Between them I'm handilly beating S&P 500 returns. 

My private IRA's are in a mix of American Funds mutual funds.  Even after loafs, fees, etc it's still outperformed the S&P 500.  Last I checked anyway, which admitidly was a while ago.

[roo_ster]

I don't have enough interest to select a diversified portfolio, though such is certainly within the abilities of most with average intelligence or better.

So, I just toss it into a S&P 500 index fund with very low fees relative to all the rest.

I also have beau coup in a MyEmployerCompanyStock mutual fund (from 401k match), but can only move out limited amounts into others.

[K Frame]

My retirement fund is with Vanguard, thus very low fees, and lots of index funds.

My account is up a smoking hot number this year.

[AZRedhawk44]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

[MillCreek]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

That's OK; we will have the Gubmint send men with guns to take it from you!

[SADShooter]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

When there's only one game in town, you play. I'm paying into SS AND a mandatory state pension plan. I can A) rely on those; or B) squeeze some more cash from the turnip of my income and put it in other vehicles, i.e. a Roth IRA. I can't really control the odds I get screwed either way, but it makes zero sense not to try and hedge.

[Nick1911]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

While I share a pessimistic outlook [didn't Poland just nationalize retirement accounts a few months ago?], I still believe it's a good idea to plan for things to go well.

[lupinus]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

Well aren't you just one big ray of sunshine

[charby]

When there's only one game in town, you play. I'm paying into SS AND a mandatory state pension plan. I can A) rely on those; or B) squeeze some more cash from the turnip of my income and put it in other vehicles, i.e. a Roth IRA. I can't really control the odds I get screwed either way, but it makes zero sense not to try and hedge.

Pretty much, I save for retirement with the hopes of retiring some day. I'm 39 years old and my retirement savings are over twice what the average retirement savings of a 55 year old is.

[charby]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

Your bitcoins could go the same way, probably a lot easier then seizure of 401k accounts.

[Ben]

When there's only one game in town, you play. I'm paying into SS AND a mandatory state pension plan. I can A) rely on those; or B) squeeze some more cash from the turnip of my income and put it in other vehicles, i.e. a Roth IRA. I can't really control the odds I get screwed either way, but it makes zero sense not to try and hedge.

This.

Anything can go to hell in a handbasket. Precious metals too, since you can't eat them. With employer matching, it would be stupid of me not to go all in on my TSP (as well as other diversifications). If things go to hell it doesn't matter, and if they don't go to hell, not investing is the same as refusing free money.

[AZRedhawk44]

Your bitcoins could go the same way, probably a lot easier then seizure of 401k accounts.

My bitcoin holdings are considerably smaller than my 401k or physical PM holdings.  Working on augmenting them, but still pretty small.

[Lee]

I like Pimco.

[Firethorn]

So I did some more poking around in my retirement plan, and I saw a Vanguard small cap and mid cap index funds.  In comparing rates of return, risk, and fees with my current managed small cap and mid cap funds, there was not a compelling business case to stay with my current funds.  So I just moved those to the Vanguard small and mid cap index funds.

I've been in VIMAX for about a year, finally hit the level where I could 'trade up' from the VIMSX version.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

I plan for the opposite, really - that I won't get any social security at all.  I'm attempting to hedge my bets - between retirement, SS, and investments I'll hopefully not be broke in my retirement.

physical PM holdings.

Physical PM?  You do realize that the government can eminent domain anything physical, right?

[RocketMan]

What is this retirement thing you speak of?

[AZRedhawk44]

I plan for the opposite, really - that I won't get any social security at all.  I'm attempting to hedge my bets - between retirement, SS, and investments I'll hopefully not be broke in my retirement.

I'm not counting on SS, or that my 401k will be merged with a big pot of 401ks and I'll get a "slice."  I'm counting on my 401k being stolen out from under me.

Physical PM?  You do realize that the government can eminent domain anything physical, right?

True dat. 

[RevDisk]

I think it's cute that you guys think the government will leave your make-believe 1's and 0's in your "retirement accounts" alone by the time you reach your 60's and 70's.

(Yes, I have 401ks from different employers... I'm just convinced that they don't matter.)

*shrug* You do the best you can with what you have. It's wisest to have retirement savings, regular investments, an emergency cash fund and a healthy amount of assets such as a home or whatnot. The government CAN take any or all of that away from you, along with your life, with no consequences or repercussions. That's what sovereign immunity, and qualified immunity for its employees, actually means.  That's the worst case. You get shot as a mistaken drug dealer, and all your assets seized without a trial.

But while that happens, it's not a guarantee. I've known plenty of folks say "(End times, apocalypse, return of religious figure, etc) is right around the corner, so why bother saving up for retirement?" Each and every one of those folks that have screamed end times are right around the corner have been dead wrong. Even the fall of the Roman Empire was the closest I can imagine, and that was a slow process by and large.

You have to hedge your bets, and that includes things not going sideways.

[RoadKingLarry]

What is this retirement thing you speak of?

That's where you have worked things around to the point where you can go substantially under the table/off the radar.

I have zero expectations of getting anything from SS.
I have slightly better expectations that my 401K or company pension (yeah, I still got one of those) will still be "private" when I get to the age where I can access either of them.

[Lee]

There's been a number of my retired coworkers pass away lately (retired less than 10 years).
I'd guess that all of them had plenty of money left. So, I'm not gonna worry too much about having enough money to maintain my current lifestyle till I die.

[tokugawa]

Retire?   
 Yeah right- the leeches are about to suck out the rest of my "disposable" income to the tune of $6,000 more per year for "insurance", for a total of about 12K. That 6K was my put aside money for unanticipated expense- dentist, tires, well pump, what have you. Now it is all going to give free condoms to Ms. Fluk.
 So where do I get money for my new dental work?$3,660? Or my new well pump and system? $5K- borrow it from CC's? Eat into savings?  Bastards don't have a clue how hard this zerocare fiasco is gonna hit the economy.

 For that matter, where the hell do I come up with the money for the deductible?