I'm scared we'll lose our retirement

[cynatnite]

For the last few weeks I've been thinking more about retirement because of the possibility of shrub and his thugs wanting to rape social security. I keep thinking that they're gonna screw us out of what little we've got in a mutual fund.

So I'm considering dumping that and putting our money into CDs and savings.

Would this be better? We've still got 30 years until retirement time.

[Bluebear]

1. Well CD's and savings won't build crap

30 years is a long time...I don't know what to tell you but I wouldn't be buying any CD's now, maybe treasury notes? I dunno.

[cally]

2. The safety depends on many factors.

Is it with a company? Bank? Other? Don't trust internet advice. Have an expert look at your individual situation and advise you.

Sometimes investments that allow you more control are also higher risk. You need advice.

[Kashka-Kat]

3. thats a good question.. and even worse than losing "retirement"

is losing the safety net which has kept elder people from starvation and abject poverty the last 60-70 yrs. I mean as I enter 50s and not having had much savings or a job that provided pension until later in life, I've been quite prepared for the idea that I won't have the leisurely retirement my parents had, that I'll have to keep working until I physically can no longer do it. I've always thought, well that's OK, at least I won't starve. Now there's a good chance we won't have even that.

I'm waiting to see if the American people wake up out of their trance enough to see we're being scammed.

[Name removed]

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[SoCalDem]

10. Not true.. They just need to put OUR money back

THEY borrowed stole it.. they can put it back :)

Let Iraq run Iraq, bring our guys back.. clean up our mess here at home ..problem solved :)

[hugo black]

18. Who stole the money?

And where is it now??

[sadiesworld]

40. SS is owed a debt.

It is no different than the debt owed individual and foreign investors. The debt should be paid the same way we pay any other debt--raise income taxes or cut spending.

How would people feel if Bush suggested that SS taxes (rate or cap) be raised in order to pay off China?

[Kashka-Kat]

31. "scam" = misrepresentation in order to obtain $$$ profits

Barbara Boxer explained it pretty good:

http://boxer.senate.gov/news/record.cfm?id=232056

Re "they haven't decided what they are going to do" Who's "they?"

Actually there's enough out there about a proposed plan for me to judge it a "scam." Its not you get a stockbrowker or get to make any creative or ethical choices of your own, there would be some Halliburton-esque entity skimming off the top for "administrative" costs (and conveniently losing a few billion here and there I"m sure).

[sadiesworld]

38. Why does SS "need" to be fixed?

Based on conservative estimates, SS can pay full benefits until approximately 2052. It seems that we have more pressing matters to attend to at this time.

edit because it's EARLY!

[DistantWind88]

39. Becasue 1952 was

53 years ago...

[sadiesworld]

41. Oops!

[me b zola]

55. Uh??

Are you echoing the neoCons (regressives) propaganda that there is a crisis in SS?

Maybe I missunderstood your response. Could you clarify, please?

[Kashka-Kat]

54. hey what happened, we were having a conversation here

message removed by moderater?

[Name removed]

8. Deleted message

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[shraby]

15. If the "fix" is going to cost 2 trillion dollars to

change the program over, why not just put the 2 trillion into the program and it will be solvent for a looooooong time.

[Name removed]

4. Deleted message

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[amazona]

19. the sorry truth about the market

Never in the history of the country has the market gone down over a 30 year period. So your retirement should be fine.

This is a misleading claim. Most of the time the market doesn't do ANYTHING. I don't know many people who are rich enough and long-lived enough that they can sit by and watch their money do nothing for 30 years.

If you look at the charts, it took until 1953 for the market to return to the level it was in 1929!

So a person took all the risk of being in the market and had no profit for 24 years.

The market continued to do not much of anything until 1982 -- even though the double digit inflation of the late 1970s meant that in real dollars your money lost considerable value.

I would think if I had waited from 1929 to 1982 (!) only to see the value of my investment do nothing in real dollars...I would be pretty ticked off.

Most of the growth of the market that has ever occurred has occurred in just 90 days -- and most of those days occurred at unpredictable times in the 1990s.

You can look it up and I encourage you to do so. Don't read junk science promising returns of 12 percent or 10 percent a year based on what happened in the 1990s. You will not be retiring in 1999. The 90s are over!

The most likely result of taking risk in the market is that you will have lots of anxiety when the market is down, lots of "irrational exuberance" when the market is up -- and in the end it will all be sound and fury signifying nothing.

I urge you to get some good strong fact-based texts on the history of the stock market. It is eye-opening reading. Too many books aimed at the public are trying to sell stock or stock schemes. Therefore they are slanted and promote investing schemes that do not accord with known economic theory.

Sure, you will likely still have your mutual fund money in 30 years. But will you have any significant gain after taxes and inflation?

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[Name removed]

23. Deleted message

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[amazona]

25. your "facts" are wrong because of human lifespan

I've noticed this over and over again that a great many people do not have any understanding of variance or risk over time.

The human lifespan is only decades. Having an investment with a positive expectation is only part of the equation.

The other part of the equation is the ability to get into the long term with your investment so that you can actually enjoy that positive expectation.

In the short term, when we deal with statistical events, I'm afraid that anything can and does happen, and it matters not that you're "supposed to" see a profit. Telling a mortal human already 30 years old to sit on her hands for another 30 years is not especially useful advice because she is not going to live forever. Her money needs to start working sooner rather than later.

To repeat, the stock market is proven that it can do nothing for decades at a time. The human lifespan is only decades. Therefore, you do not have a reasonable expectation that YOU personally or even your generation will actually be ahead of the market when YOU reach retirement age.

The people who retired in 1929 were, let's be real, mostly dead in 1953 before their money regained its value. I know several people who retired in 1999 who are now forced back into the workplace because the crash of the market meant that they are now without funds and have to start over.

Since most people do not understand statistics, and since I am poor at putting mathematical concepts into words, then I strongly suggest that you educate yourself with real math and real statistics. Otherwise, one day you will be in for a world of hurt unless you just happen to get lucky. People who plan on being lucky are no better off than people who do not plan at all.

Study statistics. The best way I know to learn about variance, positive expectation, and the long run is to count cards at blackjack, because you can get money in action so quickly. It paid off my house too, so if you have time, do it. When you see the huge swings you get in a game where you can expect to get in the long run and be ahead in 200-400 hours -- and compare that to a game where you can expect to be ahead in decades -- then you start to get a clue of how ridiculous it is to rely on the stock market as anything but some extra spending money in old age.

I think of my friend who planned to retire in December 2001. 9-11 came, margins were called, and he is working yet.

For long term conservative funds the US market is statistically flawless.

This is a phrase that does not seem to carry any information at all except to suggest that the writer does not what know what "statistically" means.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[hugo black]

29. You keep going back to the short term argument.

I understand you completely. You, however, do not understand me.

My point is a simple one: If you invest in the overall value of the stock market through diverse mutual funds and other entities today, in 30 years it will show positive returns.

And I make this claim, because never, in the history of the US market, has such has the value of the market been less then it was 30 years prior.

Thus, statistically flawless. Or, historically flawless, or (insert modifier) flawless.

Personal attacks aside, I would love for you to address my actual point.

[SmokingJacket]

26. Anyway... there is always a first time.

Bush lowered taxes during war time... that was something that had "never happened."

Bush had less than a 50% approval rating weeks after he was "re-elected": that had "never happened," either.

Repubs are pushing for privatization because suddenly corporations will have big chunks of dough to play around with and cull profits from -- and you know it. They're not concerned that my mother have a safe and solid retirement fund.

[hugo black]

30. Your right.

Just because the market has always gone up over 30 year periods, doesn't mean it is guaranteed.

We are seeing a lot of firsts these days.

[reallygone]

44. Let's go to the videotape...............!

Check out the real numbers. Decide for yourself.

A good link on markets around the world:
http://www.finfacts.com/stockperf.htm

Even better on U.S.!
http://www.moneychimp.com/features/market_cagr.htm
http://www.personal.psu.edu/users/f/l/fle1/505/infosheet.html

Another good history of the market in the modrn industrial age:
http://www.zealllc.com/commentary/century.htm

Check out the Federal employee returns in their program which the SS reform will model (including both Bush recessions):
http://www.tsp.gov/rates/monthly-history.html

[hugo black]

5. It depends what you want..

If you are saving on you own, you just have to decide what kind of returns you want vs. what risks you can live with.

Mutual funds are very safe, as long as you are managing them and keeping up on your research.

Never in the history of the country has the market gone down over a 30 year period. So your retirement should be fine.

With CD's the money is not as accessible if you need it quick, and with savings you return will never be more than a few percent, but at least it will be guaranteed.

These are all decisions you must make for yourself. But either way, never rely on Social Security, whether bush fixes it or destroys it even at its best it will only provide a meager existence.

[oneighty]

24. Boy so confident you are

I lost about six thousand in SAFE mutual funds like almost the day I invested. Safe the broker tells me. Meanwhile my Managed Mutual Funds pay out (TIAA CREF) took a thirty two percent hit when Bush came on line. That still has not recovered. Moved the money that was left to real estate--perhaps that will work.

Read the fine print. If you cannot afford to lose money in the stock market do not play.

At best it is a crap shoot. Some win most do not.

180

[meisje]

6. mmmmyeah we'll all be dead in 30 years anyway

[SoCalDem]

7. Every "generation" republican ne'er-do-wells manage to grab the cash

There were lots of elderly people who bit the dust during the S&L Robberies in the 80's... The dot-com bubble eviscerated a lot of people who invested in "the future"... the various deliberate recessions have gobbled up millions "on paper".. and we all know about the "Enronistas and theior buddies"..

The only people who know just when to grab the cash and lower the boom.....are the very ones we "consult" to "help" us invest..

Granny consults with the wolf, and then is surprised when Wolfie devours her??

This shit has been going on forever and it always will.. There are the lucky ones who manage to retire "just in time" and then do not outlive their pensions before the next "gobble", but we never know whether we will be lucky or not..

and for the ones who do manage to collect a pension, are always being nickel and dimed via the chiseling away of the insurance benefits that were originally part of their package:(

[Name removed]

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[SoCalDem]

13. "Most" people of modest means have no "extra" to invest

They are "investing" in rent/mortgage , food, gasoline, medical insurance premiums, college for their kids, ...you know.. frivolous things like that..:P

[hugo black]

20. In that case....

they are not really affected by the market anyway, so what is the point?

[Name removed]

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[Warpy]

9. It's hard to say what's going to happen

but I'd put my money (if I had any) on another round of inflation that will eat up the cash value of CDs and stocks, alike.

The best hedge against inflation has always been gold, which tends to keep its value in terms of purchasing power whether inflation or deflation is occurring. However, gold is hard to store and it doesn't grow in value or produce interest or dividends.

Mutual funds have been screwing you all along. Thanks to Eliot Spitzer, they're now screwing you a lot less than they used to.

We all know the present system of exporting jobs, holding wages down, shifting taxes onto the backs of the few working people left, and fattening the rich while throwing the country deeper into debt is an unsustainable one. Something has got to give, and soon.

Good luck.

[hugo black]

16. Who's Backs?

The lowest income Americans pay nothing in payroll and income tax, many even get extra money back.

And while the richest one percent pays something like 40 percent of the taxes in this country they can still afford to pay more in taxes and buy their boats.

The weight of the "present system" is on the middle class. Those 40-100 thousand a year earners who are scraping to send there kids to college because the are just out of reach of government assistance, and cant seem to put anything away for later if they want to live comfortably.

It is the 15-30 percent of their income every year that supports the weight of this system and breaks their backs.

[eridani]

34. Wrong. Everyone with a wage up to $90K pays payroll tax

And a bunch of sales tax as well.

[SoCalDem]

37. Don't drink that koolaid..

The "facts" you are repeating are talking points that have been falsely played over and over like a stuck phonograph needle on an old record.. "Say it often enough,and people will believe it"..

The facts are:

Most people who are 40-50 right now...have NO company pension unless they belong to a union and /or work a civil service/government job (and they are scarcer and scarcer)

Those same people are being squeezed everywhichway to sunday with elderly parents who need their help, grown or nearly grown kids who still need their help...

Wildly escalating medical insurance premiums at the exact moment in their lives that they NEED to use the insurance...

Rampant downsizing/offshoring/outsourcing which makes their jobs precarious, when in past times these were the same folks who were at the TOP of their earning capacity.. These days a 4-50 yr old worker is likely to wish he/she were invisible, so that THEIR job will not be one of the ones "poofed"..

Raises have been few and far between because bosses are feeling the squeeze too.. In past years annual raises were the norm, and now it's likely to be a 5% "raise", but your medical goes up 15% and the copays double or triple.. what raise??

Some employees feel such hideous pressure that they are willing to even take pay-cuts to secure their future employment, only to find themselves still pushed out the door 10 to 15 years before they can even draw social security..

Every salaried employee pays FICA/Medicare even if they are poor.. Some who get EIC may actually get money back from the IRS that they did not pay in taxes , but they still pay into SS.. The ones who are shirking are the ones OVER 87K, since all their income above that is exempted.

We need to decide what we want to be.. Do we want to be a country that is content to cast aside our elderly and weak? Does being a citizen of this country come with NO up side?? Most civilized nations realiize that when the general public has a "baseline" of safety...health, welfare, education.. everyone is safer, healthier and infintely happier.

The rich will always be "just fine" no matter how much they pay in taxes, even if they whine and cry about all the taxes they GIVE AWAY.. Boo Hoo.. Most of the people in the top 15% could probably lose 3/4 of their "worth" and still live the rest of their lives in luxury.

Instead of trying to always cut services to the poor, perhaps the realistic approach is to mimic the Bible and be generous.Fundamentalists are eager to "tell" us how giving has bigger rewards, but unless there's a camera and a microphone involved, lots of them are not very generous...with the exception of handing out public tax money to their "pet" theological organizations and their rich pals..

[Name removed]

49. Deleted message

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[SoCalDem]

53. Calm down :-).....I have NO problem with religious people

I do take offense when the pseudo-religious (fundamentalists) , and after you have been here a while, you too will understand that we DO make a distinction here between the charlatans like Dobson, Falwell, Robertson,Sun Yung Moon, et al...the ones who "talk" their faith to the limits while shoving money into their pants..:)( You know the ones.,. the ones who are holy-holy in public, like *²,Neil Bush & Marvin Bush, & Bill Bennett, & Jeff Gannon & so many others.. Like roaches that scatter when the lights are turned on, they do their best work in the damp,dark hidden places :) Some of these pseudo religious republicans seem bent on breaking the land-speed divorce records.. So much for honoring committments and personal responsibility :)

People who are truly loving and helpful usually do their giving in private, and do not give themselves whiplash while the pat themselves on the back :)

I seriously doubt that on a lone poster on an "Internets" forum will singlehandedly sink the democratic party if a few people "mis-underestimate" my sentiments :)

[reallygone]

47. You're rich!

the people making $40K-$100K are in the top 25%. You can afford college? Now I knwo you are rich!

I agree with you. Poorer people don't have money to invest. That's why we should set up these SS personal accounts so they can get at least some of the gravy. They are already contributing to that fund anyway.

[KayLaw]

51. Explain that to me

Exactly how are these accounts going to work? I thought the details hadn't been released, and that the reason so many are against what we've heard so far, is that everyone's benefits will be cut by a large percentage--no matter what.

[Alpharetta]

12. I have a majority of investments outside of U.S.

I don't trust the dollar, U.S. stocks or the Federal budget.

I expect more terror acts to be allowed here. I expect a larger deficit, a tumbling dollar, and a fumbling economy.

I sold half my portfolio and invested in overseas stocks and bonds. Here is a typical holding. http://finance.yahoo.com/q?s=BEGBX

No portfolio is bulletproof but I've learned to trust my research on long term economic trends. Read many different sources to get an idea of your risk tolerance and expectations.

[amazona]

14. what kind of mutual fund?

As a very general rule, I think it's too soon to pull out of the mutual funds. If there is privatization, it will bring some new money into the market for a while and you might be able to run up a little. Pull your money out in say 3-5 years after the transition.

Rather than CDs/savings accounts, you would do better to look at Treasuries and I-Bonds for more conservative investments.

As you say, you have 30 years. There is no hurry. Few people as young as you are able to save anything for retirement -- they are still paying off education loans, buying the first home, starting a family, all those expenses of the young family. If you're ahead of average, you'll be OK.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[moggie12]

17. While you're trying to figure out what to do, sign this petition.....

It's one little thing to do to help fight Bush's SS plan (the AFL-CIO is trying to fight the Wall Street firms and corporations funding the pro-Bush propaganda effort).
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x3119524

As for me, I've been keeping my 401K in the market since we seem to be having another one of those "irrational exuberance" episodes. Between the deficit and the fact that most Americans are drowning in debt, I have no idea why it is up, but up it is!!

[amazona]

21. it has never returned to its previous high actually

It isn't really up because it has never returned to its previous high and, also, it kind of cheats because it takes out all the bankrupts like Enron, WorldCom, etc. The Dow of 10,700 today is not the Dow of 10,700 of yesteryear. But this is more an issue for those who were suckered into buying individual stocks. Those folks will never regain what they lost to Enron, Worldcom, and the rest because their investment went to zero. :-(

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[moggie12]

28. yes, you're right, the Nasdaq was 5000 and now it's barely breaking 2000

It's the little guys that got hurt -- my roofer and my plumber told me they'd lost their life savings -- they'd been buying on margin and got wiped out. I was talking to a hotel clerk a while ago whose husband put the entire proceeds from selling his car repair business (he'd run it for 30 years!)into the NASDAQ in 1999. She said they didn't blame the Merrill Lynch broker who advised them to do this because "he was a nice young man and he felt bad about it." I told her they should sue!

Disgusting!

[disgruntled_goat]

22. my retirement: ice floe

haha only serious

[Bridget Burke]

48. Nope. Haven't you heard about global warming?

There won't be enough ice floes to go around.....

[cynatnite]

27. Janus

They've been okay with us. We've had them for six years, (yeah, we were late starting on retirement) We chose a fund that wasn't real risky since we're saving for the long term. Also a savings account, too.

We're not looking for an extravagent lifestyle. Just to be able to live decently. The house will be paid off and we want to take a long trip to Europe. That's the big plan :)

[trof]

42. Janus lost 1/3 of my retirement IRA.

They suck.

[DU GrovelBot]

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[Hell in a Handbasket]

33. buy euros. nt

[flobee1kenobi]

35. Never in the history of the country has.......

Seems we've been saying that a lot lately
Since 2000 we've seen a lot of things "happen for the first time"
I like the Euro idea-I don't see a lot of loss going on there.

[DistantWind88]

36. Invest your money and save

Anyone who told you that SS was "your retirement" sold you a bill of goods. SS was NEVER meant to be anyone's retirement plan.

[Name removed]

43. Deleted message

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[sadiesworld]

46. Privatization has failed everywhere it has been tried.

The UK privatized 20 years ago and it has been an abject failure. They are now looking at our SS system as a template for reform.

[Bridget Burke]

52. Bush & his cronies hate Social Security & want to destroy it.

The "private account" scam is not intended to solve any problems with SS, but to make more. Private accounts independent from SS are a different thing.

Lying is a sin.

[cattleman22]

50. If all you have is in a mutual fund, diversification into some bonds

may be worthwhile. However, if you feel that SS will not be there when you retire, you may have to be more aggressive in your savings rate and your investments. Also look for mutual funds or index funds that have lower fees. The fees can be highly variable.