o/t retirement investing

Now i know ill get as many opinions as there are people on this board and thats all im asking for is opinions.No derogatory comments. When it comes to saving for retirement what is the best option when like me have 35 to 40 years to go before retirement age? do i save in a 401k? started one 10 years ago when i was just 20 and put very little in it, this past spring i changed jobs and its like pulling hens teath to roll it into my new account.Im not happy with my current job either so im looking for a new job so really whats the point in going through the hassle? i have to add that im getting charged a percentage every quarter just to have that account. now im very dumb when it comes to stock/cd and all that mumbo jumbo i always contribute to the guarenteed fund (not a gambler with hard earned money). So would i be better off stashing money into a savings account somewhere or making other investments such as land etc.where the value rarely declines? or just keeping rolling money into 401k from job to job not knowing whats happening with my money? yes im aware theres considerable tax breaks with retirement plans but is it really worth all the hassle? you still have to pay tax on that money after retirement just not as much. thanks for any opinions i get here i just really dont trust anyone with my money especially the roller coaster economy we have now a days.

There is no such thing as a "best" option, John, but any 401k plan with an employer match is a no brainer.

You may also wish to open a Roth IRA account if you have discretionaly funds that you would like to invest for retirement.

You may wish to investigate rolling your 401k funds into a Roth if you can afford paying the taxes that will be due upon doing so. You will be able to spread the roll over over several years to spread out the tax hit.

The real decision(s) involve how to invest the funds in your 401k(s) and IRAS(s).

Dean

This discussion from archives 12 11 2011 will get you started.
http://www.ytmag.com/cgi-bin/viewit.cgi?bd=ttalk&th=1071082

I understand what you mean about the employer match but most places you have to stay there 5 years to be fully vested. So like my current job I"ve been there about a year and already looking for a change

Anyone with a 401k has lost big time money,some can't retire now because there money is gone or was stolen by companies.A local company was sold and the goverment said the money invested belonged to the company.The workers got nothing.

"stolen by companies"... it's also stolen by the declining value of the dollar. In my opinion the "official retirement plans" aren't what they used to be. I wish I'd have invested in land instead of paper.

While its true many IRA's have lost value it is still a good deal when the employer contributes a match. Just start out with some basics such as putting as little as possible in the companies stock and keep a diversified portfolio. The old adage of not putting all your eggs into one basket is probably the best investment advice. And keep is simple unless you really want to study the investment markets. A mutual fund that mirrors the S & P 500 is a good choice for stocks. I remember a financial planner telling me that the farm land I was buying would never be a good investment. I fired him years ago.

Not all eggs in one basket. We are in fragile times, big companies as well as small as well as big insurers are going bust. MF Global mess shows even 'garrenteed' individual accounts will disappear when the chips are down, and after 3 months no one is even close to jail with 1.6 billion dollars missing......

So, again, not all eggs in one basket!

Land, gold, silver are ok storage places, you have something, but you can't own 'paper' silver or gold certificates, you need to have the lumps of metal in your hand. (MF Global, again, shows that if you own a piece of paper that says there is a stock, pile of dollars, precious metal, retirement fund, or any other such in your name that they so nicely hold for you, you actually only own the paper, the actual asset can be used for loans by your investor company & really you own nothing.... MF Global is a big deal, it changes the game dramatically, not many are realizing this... )

The game with these assets is to get in and get out the opposite of most people, so you make money, and that is a tough game to learn. When your dentist is talking about buying land or gold, it is too late, you are at the end of the bubble, be buying the next fad.....

Employer matching accounts are a no-brainer, but if your company goes bust the funds are gone, so I'd be scared to have it my only investment. I'm self employeed so don't know anything about them, can you roll them into your own account at some point, so you control it, get it away from a company that is going down?

CDs and Mutual accounts are destined to very low returns, less than inflation. Safe, but doesn't do anything for you. But - safe. Safe can be good in troubled times.

One option not many look at or know of is Muncipal Bonds. Local governments sell bonds to build schools, etc. and if you get a city backed or well insured type of bond they can't default on they are as safe as anything around. They appear to pay low interest rates, but most are tax free, so you own no income tax on them at the end of the year. This can make them attractive esp if you get to a higher income bracket. They can be bought & sold as an asset, so if you need to get to the principle you can sell them before maturity. A pretty good deal for a portion of your assets. Safe, return a tax-free income every 6 months, and can be sold if need be with no penalty.

Long term stocks are supposed to be good, find something with low fees and put your money in and forget about it, will go up and down over 30 years but should find some big spikes up over that time. The mutual funds tend to be watered down to mediocre, might want to look to long term steady growth stuff and just leave it alone. For example, people always drink beer, times get tough and people drink even more beer, so tends to be a good long term....

Roth IRA is good to put money away for retirement. Do we trust the govt to not tax assets a second time when the govt is broke and we have a big pile of retirement Roth's sitting out there???? Not sure the 'tax free' deal will really pay off.

Regular IRA is a good place to put money away for retirement and gain a tax break the years you contribute to it. Gives you something for now, and something for retirement.

One of each type gives your tax preparer some options....

If you are the type that can lock money away for retirement & leave it alone, the IRA and employee matching stuff is good. If you are the type that 'needs' to access that money every decade to buy a house, handle a divorce, refinance your credit cards, then might as well make it easy & invest in your own non-penalty stocks and bonds and land and metals so you can cash them out & start over every 10 years.

--->Paul

Never roll 401K money into another 401K plan, put it into an IRA instead, you will have a lot more investment options to choose from that way.

I've never invested money in somebody else's business. And I sure don't want to have cash lying around. Inflation will eat you up. If I didn't have a business I'd buy real estate. Buy and sell. Then I'd have a business.

I think the bigger question is seek a stable company in a recession proof industry, with a defined pension plan and a 401K.

Those companies aren't the most 'glamorous' to coin a phrase, but they keep making money throw off decent dividends to their shareholders.

Don't put all your eggs in one basket but diversify (savings,IRA,CD's, real estate etc.).

Yes, the corporate match in both a defined pension plan and IRA is a no brainer, but select the right company.

"When it comes to saving for retirement what is the best option when like me have 35 to 40 years to go before retirement age?"

TIME is on your side....that is the best part of any investment portfolio...TIME is on your side.

Of course, some of the other important things to learn real quick if you want to have a secure retirement are among others....

Save money.
Live below your means.
Live within your needs.
Don"t do anything foolish with your retirement money...

#1--get your 401k money out of any plan whenever you have the chance and roll it into an IRA....more choices that you make and not someone else making them for you.

#2--at your age, a ROTH IRA would be a good idea....hope that when the gov. changes the "tax free" rules they grandfather the old rules...highly likely.

#3--Understand that any investment advice is an opinion..(mine too)

#4--an investment that is good for the goose, is not necessarily good for the gander...

#5--things go wrong even when you do things right



Tim---still working....

P.S.----real estate, land included, can lose you money....especially if you need to sell it when there are few buyers...like now...



My $.02

You said "now im very dumb when it comes to stock/cd and all that mumbo jumbo"....all the guys gave you good answers but they mean nothing because you are "very dumb". That's the key...nothing that the rest said will help you until you learn every thing to learn about finance. You may not want to but then don't complain that you're being screwed. Only when you learn and "un-dumb" yourself will you be in charge of your own destiny. Hate it but do it. Otherwise, you're at anyone's mercy...a investment broker, a dumber friend, a huckster or the process of inflation.
You want to stay stupid, your business but you'll get slicked.

[i:654c4848f0]P.S.----real estate, land included, can lose you money....especially if you need to sell it when there are few buyers...like now...[/i:654c4848f0]

Now you tell me...
Jerry

(Who has everything he owns in RE)

Personally i've never believed in letting other people manage my money,in the long run it don't pay

I would buy land (they ain't making more of it) and farm it myself,in 30 yrs time it prob at least doubled in value.

I bought a chunk of land 18 yrs ago for a 1/4 million and made/make my living off it.I turned down a 1 million dollar offer last year.I wasn't ready to retire..not yet.

You could start a Roth Ira, money comes out tax free at 65 or 67. I think u can put in $5000 a year

401k plans have a place and a lot of the people that lost money in them lost the gain they had accumulated. not the actual money they had put into the plan. No all company matching stock plans are bad either. I sure would like to have started out with a few companies like Microsoft, Lowes, Home Depot, Auto Zone, Apple just to name a few. If you don't know what to do with your money talk to people who have had success with a financial planner and use the ones they used. Sure it will cost you some money but managing your own plan might cost you more. I personally think rental property is one of the best investments you can make. Might have to put up with some hassle at times but if you do a good job of screening your renters this will help.

If you are 30 years old then you need to put money in a 401k and/or an IRA now. The best thing for you is that you have time on your side. 35 years is a long time till retirement and if you save $3000 per year and invest that in the market you should do well. When I was in my 20s I put over $25k in retirement accounts. I still put money in funds. I am 42 now. I have 20+ years yet to invest and save. The best thing to do is have it taken out of your paycheck automatically by your employer. The Social insecurity system tells me on my statement every year that I will not be eligible for full SS benefits until I am 67.

"what is the best option when like me have 35 to 40 years to go before retirement age?"
The main thing is to start saving religiously NOW. You should be putting at least 10 percent of your before-tax income into a retirement account. What you invest in is less important than to start saving in the first place. The other thing is to keep your debt paid down.

"do i save in a 401k?"
The reason for putting money in a tax-deferred account is that you receive interest on money you would have otherwise paid in taxes. Presumably when you take your money out you will be in a lower tax bracket than you are now so you'll be taxed at a lower rate. But even if you take your money out while you're still working, the compounding interest effect means you'll have a lot more money if you pay the taxes later rather than sooner.

"its like pulling hens teath to roll it into my new account"
Really? Did you talk to the company that manages your OLD 401k or the one that manages your CURRENT 401k? I think you'll find that the latter firm will be MUCH more helpful when it comes to rolling your old account into your current one. But you should consider moving your old 401k into an IRA; you should have no problem finding a company that will not charge you a maintenance fee with your current balance. I will recommend two companies: T. Rowe Price and Vanguard. There are many others.

"i always contribute to the guarenteed fund"
So you are guaranteeing that your investment won't keep up with inflation. That's not avoiding risk, that's being stupid. With over 30 years left to work, you need to diversify. You should have at least two-thirds of your money in stocks right now, you can move them into bonds and fixed income accounts when you get older.

"...land etc.where the value rarely declines?"
Where have you been the past ten years? Believe me, if you had invested all your money in California real estate back in 1999, you would surely believe that land can and will decline in value. BTW, as a general rule, undeveloped land is one of the worst investments you can make because it has a negative cash flow until you sell it, and it is very illiquid. Developed property (eg. rental homes) can be a good investment under the right circumstances, but is still risky, illiquid and typically has a negative cash flow.

"...keeping [sic] rolling money into 401k from job to job not knowing whats happening with my money?"
As stated before, you can roll it into an IRA with an investment firm you trust and that provides you with the transparency you desire.

"i just really dont trust anyone with my money"
The alternative to trusting someone else is to do your homework and take an active role in managing your investments. Yes, it's a lot of work and may or may not give you better results than letting the professionals do it for you. But it's not like there are any other options.

Problem with land as an investment is the annual Ad Valorem tax that you have to pay....eats up your potential profits.

Wow I"m getting a lot better responses than I thought I would. As far as land goes in my corner of this rock it"s quadrupled in price in the last five years thanks to the oil and gas boom. As far as having a hard time rolling one 401 to the other the trouble is with the new job wich goes through van guard theres a lot of red tape to dump a large sum of money into it. And I have been saving since I was 20 years old.

Wow I"m getting a lot better responses than I thought I would. As far as land goes in my corner of this rock it"s quadrupled in price in the last five years thanks to the oil and gas boom. As far as having a hard time rolling one 401 to the other the trouble is with the new job wich goes through van guard theres a lot of red tape to dump a large sum of money into it. And I have been saving since I was 20 years old.

Wow I"m getting a lot better responses than I thought I would. As far as land goes in my corner of this rock it"s quadrupled in price in the last five years thanks to the oil and gas boom. As far as having a hard time rolling one 401 to the other the trouble is with the new job wich goes through van guard theres a lot of red tape to dump a large sum of money into it. And I have been saving since I was 20 years old.

Wow I"m getting a lot better responses than I thought I would. As far as land goes in my corner of this rock it"s quadrupled in price in the last five years thanks to the oil and gas boom. As far as having a hard time rolling one 401 to the other the trouble is with the new job wich goes through van guard theres a lot of red tape to dump a large sum of money into it. And I have been saving since I was 20 years old.

Wow I"m getting a lot better responses than I thought I would. As far as land goes in my corner of this rock it"s quadrupled in price in the last five years thanks to the oil and gas boom. As far as having a hard time rolling one 401 to the other the trouble is with the new job wich goes through van guard theres a lot of red tape to dump a large sum of money into it. And I have been saving since I was 20 years old.

Man my heart bleeds for you. Nothing pays anything now a days and I feel that the US Govt. FED and other insiders fixed it that way so that the US GOV could borrow all these trillions and get it essentially interest free. So to you and me that is a behind the scenes tax that they are forcing us to pay but nobody talks about that.....shhhhhhh!

So you go to an investment counselor, that is where I started when I was young and naieve, and my personal experience with all of them, name brands and all is bad.

Read my lips: NO ONE CARES MORE ABOUT YOUR MONEY THAN YOU DO!!!!!!!! AND IF YOU DON'T BE CAREFUL, THEY WILL USE YOUR MONEY TO MAKE THEMSELVES RICH......CALLED HUMAN NATURE.

Moving company to company can present challenges. I didn't have that problem. I stayed with the same company for the duration and had my 401k and after the kids got grown and all, the company did a full match $ for $ what I put into it, up to 4% of earnings (total 8% of the gross) and believe me that can add up fast.

Problem with putting money aside when you are young is to put it where you can't get to it if you have financial problems....yeah verily it's nice to have to pull yourself out of a rut, but you just spent your retirement.

Brokerage/fund fees can eat you up so pay attention to what you are having to pay.

And on the stock market outpacing everything else.....wala. 2011 is a good example....after 3 years of bust, your stock market money finished where it started......but you still had to pay the fees so you lost money.

Good luck man,

Mark

Rule Number One: Don't invest your retirement money in your own company's stock. Now some companies may require some or all of your 401k to be directed to company stock, but you should only invest the minimum required percentage and move it into a different investment as soon as possible.

Mark:
That is only partly true. I used to work at a large public company that automatically gave you a discount below the market value of the stock when you bought some. I only had a total of 100 or so shares of it and I sold all that I could when the price was high. Everyone that worked there knew that it was a good deal so they bought it and sold what they could.

Now as far as GM goes.....My BIL lost a pile of money when he kept all his stock till the very end when GM went bankrupt.....Super stupid.

Diversify. At a young age, you can be more aggressive younger but as you age back off on the aggressiveness. Invest in things you know also if you can. I'd also recommend educating yourself on investing through printed and TV media. Get a magazine on investing such as Money. I think watching CNBC is also invaluable. If you learn a bit, open a brokerage account online and trade a portion of your savings yourself, just don't put all your money in individual equities.

I don't have any advise on investing, the other responses are already better than anything I can think of. But I do congratulate you for being mature enough to think about saving for the future. Keep pegging away at it and you will succeed. Jim

Utility stocks are usually a good, steady investment. Also, practice saving money each month no matter what you do with it. Sometimes just a plain savings account is ok, especially wiht the roller coaster stock market. Good Luck! Ellis

Aside from utilities and other GSEs, there is no longer any such thing as a "stable company in a recession proof industry."

Additionally, due largely (Note: I did not say exclusively.) to disastrous federal policies, private industry entities are dumping defined benefit plans as quickly as they can.

Dean

NOT true.

Whether one has lost or gained money in their 401k over the past (pick a period) depends EXCLUSIVELY upon how they chose to invest their funds.

Dean

I retired at 55. Here is my financial advice.

1. Work for a place with a good pension.

2. Your best investment is to pay cash for your cars and trucks. Don't pay interest to a bank. My last car payment was in 1975

3. Your next investment is never pay credit card interest. I make money with my credit cards instead. Use them as debit cards. All my credit cards are auto paid directly from checking so there are no late fees and no interest. Getting interest back from the money you spend exceeds the interest you can get from a Bank savings account .

4. You can't retire with a mortgage payment. Make sure all your debts are paid for long before you retire. Getting rid of all payments will make you the best returns on your money.

5. Nothing wrong with 401K's especially if your employer has matching contributions. I look at it as free money and your contribution reduces your income taxes. With the down turn in 2008, many of my 401's became 201's.

6. Don't put all your eggs in one basket. I have CD's from a Bank. At one time that provided a good return. In 2008 the value of my CD's didn't decrease by half like the 401's, on the other hand, the current interest rates on CD's SUCKS.

7. Been looking at taking CD dollars and buying gold coins. More for a security reason instead of making a profit. With many countries, including ours, both sides want to spend more than they take in. Think of what has happened in the past 3 years. Our national debt has gone from 1.5 trillion to 15+ trillion. I hope it doesn't happen, but I think the sky is going to fall soon, and dollars will be worthless. This will happen when countries like
China won't loan us any more money. For every $2 our government spends, it borrows $1. How long do you think this will continue at it's current rate?

8. 40 years ago I started a rental business. Bought homes, fixed them up and then rented them out. Sometimes it's a BPIA. Took all the profits and bought other places. Home values were thought to never go down, but they did fall. However, the rent I collect has never fallen, just goes up. Rental business gives me something to do and it still provides a good source of income. Sad to say, there are more good people who want to rent after losing their homes.

9. Most people don't think of insulating their home, upgrading doors and windows as an investment. It's the best money you can spend. Beats cutting wood. I also have happy tenants, because my places are very energy efficient.

10. Don't be like uncle Sam and spend more money than you bring in.

11. If you are thinking of a supplemental retirement income, find something you like to do, start out small and make sure you can make a profit.

12. There is no pot of gold at the end of a rainbow. There is no place to put your money that is going to make you a pant load. Invest in many different things.

Hope this helps you. It's worked for me.

George

Do as George suggested on paying cash for a car or truck. My last car payment was in 1962. I bought used cars and trucks with low mileage til 2001. I still have an old Mercury Cougar we bought from my wife's sister in 1985 with 15k miles. It still only has 56k on it now.
I paid off the mortgage in 10 years since I worked a lot of overtime.
I had a daughter in college getting her BS and MS in nursing. She also got an MPH in Public Health from Johns Hopkins. She took out a low interest loan from Hopkins and paid it off in 10 years. We had to help her since she couldn't work while attending Hopkins. These interest rates are for the birds for people like you trying to build up your IRA's. The banks are loaning your money out for a much higher rate and everyone else that has money saved. They should fire Big Ben Bernanke. Hal

That sounds like very good advice.

The days of handing your money to someone else and hoping they make it grow are over and have been for a few yrs now. That was just a convenience thing for people who never wanted to be bothered with the rule of buy low / sell high and do it your self. No one will care for your money/you like you will. Keep 100% control and educate yourself on the buy low/sellhigh rule and it,s millions of applications. Once you do that , you will want others to give you all their money while you rent it from them for 2% or less. We will never again "LIVE" off our interest like our great and grandparents did. As far as "get a job with a pension" good luck ,buddy , that's an extinct word too. Do you think Japan pays it's retired auto workers a check every month for the rest of their life just because they had the honor of working their? Bottom line , be a bussiness man , there are no free rides and thousands just looking to "borrow" your money. Roth IRA,s are nothing but mutual fund investments. I put $20,000 in one for me/wife 5 yrs ago. It fell to $13500 and has struggled to even getback to $17000. It's out of there and i've allready made back that $3000 in less than 6mos just using that "rule" I told you about above. Take care of your own house...nothing but corruption and greed out there.

Deereman I have not read all the replies and no insult but i don't know your capacities. I do not care for some of those 401 things myself but they have there place. Here is my ideas: Real estate yes, but look at stuff that pays its way (farmland, wood/timber lot 4 unit apartment, gravle pit etc) buying land just to hold it can be non productive. Collectibles yes but in a limited way and know the market and remember fads/trend change (tractors, guns, antique cars, etc) Stocks bonds yes (but get some help if you are not into them yourself) Go to a bookstore and buy some rags on this stuff (there are many) Yes diversify some and if you are not into something nor understand it stay away ( stamp: coin collecting, bonds, warrents, etc) I hope this helps some

Guess I should have mentioned I bought my house at age 19 it's a little better than half paid off. I don't plan on moving job to job was at one place 9 years but there business relied on the housing industry go figure. Was tossing around the idea of say buying these old tractors then sell at retirement age I know it sounds bad but think they are just as valuable as anything out there. They also don't seem to get any cheaper most are 2 to 3 times as much as they were new then you actually have something besides paper. Or maybe save some and buy some tractors kind of split up like everyone is mentioning

Show me one person that made money? Not talking about CEO's.

The 401K worked for me. Despite a relatively modest salary for my profession, I was able to retire comfortably at age 55. Success wasn't helped by an unexpected divorce so avoid if possible. Did a lot of day trading and some longer period week trading because I believed it was worth the risk. Don't believe I ever held a position over one month. A couple more years working if I lost, but if I won, the benefits could be huge. In essence, a small penalty for losing vs a potential loaded bases home run. No margin trading, wasn't willing to roll dice that big. Early success provided a safety net which allowed me to be more aggressive with outside equity that purchased farm real estate. Knew if things went sour on the outside, the 401K would allow us to survive. Requires some effort but market volatility can be your friend; eg, the last couple years I decided to play again and took a very modest portion of my 401K and aggressively traded it; very similar to what I did when employeed. Return on these dollars was 28% last year and 33.5% this year. Unwilling to risk it all because I've won and don't need the stress. It is largely entertainment. But if I had only limited dollars and hated going to work every day, it would again be all be on the table.

I probably shouldn't bring this up, but the Japanese do have pensions. And lots of unions.

Collectibles are in general poor investments. Consider how many tractors you would need to own at today's prices to be able to retire, if you were going to retire today. Then consider how much it will cost to store and maintain those tractors for the next thirty years. That's not to say you can't make money on collectibles, but rather that you shouldn't rely on them for future income. Collect because you have an interest in the collectible; if you happen to make money at it, well that's icing on the cake. This is true of any collectible, such as coins, guns, postage stamps, etc., but it's particularly true of tractors and motor vehicles that require maintenance and a place to store them.

I've already heard of land sold, sans mineral rights. May increase, as people get tired of our winters and trucks pounding the roads.

I think on number 7 you need to research some more...

Yep. worked for a large utility in NYC.. Had a choice of working for a large advertising agency, with major national accounts or working for at the time a smaller utility..

Chose the utility, best decision I ever made..

I have, as has EVERYONE that has had their 401k funds invested in CDs, fixed income funds, money market funds, etc.

There is no requirement that 401k funds be invested in equities.

Dean

I agree with mark you need to look at storage, insurance and so on. I have seen the collectible phase model t, a 50's 60's cars etc my worst fear is say you got that 100,000 1930's packard but no one is interested in it in 20 years so its worth 50??? Also guns, cars etc are not generally reconized by banks say you need money or a loan (they must be converted to paper (could take 2 years to sell the 1935 packard???)

HUH, what would you do if you have $75K in a bank making nothing? Been thinking of buying gold coins from a coin dealer for $50/oz over market value. Investors say one should have 10% in metals. I don't like the idea of having electronically traded gold, when we have many countries spending more than they take in.
George

This is the part you need to search...Think of what has happened in the past 3 years Our national debt has gone from 1.5 trillion to 15+ trillion