Conservative Political Forum

General Category => Financial => Topic started by: supsalemgr on February 09, 2013, 12:48:49 PM

Title: Interesting 401-k Info
Post by: supsalemgr on February 09, 2013, 12:48:49 PM
http://www.foxbusiness.com/news/2013/02/06/young-bucks-how-and-why-your-401k-is-changing/?intcmp=obnetwork (http://www.foxbusiness.com/news/2013/02/06/young-bucks-how-and-why-your-401k-is-changing/?intcmp=obnetwork)

It doesn't seem that all young people believe Obama and the dems will deliver for them at retirement. I am encouraged that these folks are understanding that SS is not what to depend upon at retirement. If they are making these kind of decisions it means they are reachable for the GOP and financial/fiscal sanity.

We clearly must make some changes for people who are under fifty as far as eligibility is concerned. One might surmise from this article that this group understands. Being one that is collecting SS I believe most seniors also understand the Ryan type plan would have no affect on them. I firmly believe the dems and the MSM are the ones making all the noise about seniors not being for any changes. They are well aware any self-direction would remove billions of dollars from the collections and they would not be able to "rob" SS.

There is one dirty little secret about SS and the premise it is not taxable. I was self employed after I reached my full eligibility and started collecting SS. If one earns a certain amount then 85% of SS is taxable. My CPA advises that IRA distributions are considered "earned" income in relationship to SS payments. That is double taxation as our payroll taxes were part of earned income and we paid income taxes on those amounts.
Title: Re: Interesting 401-k Info
Post by: Bowhntr on February 09, 2013, 12:56:50 PM
I know that I need to contribute more and hope to start doing so soon.  However, one thing that I did do in just the last few days....as soon as the markets hit the pre-recession levels I moved 95% of my entire 401(k) to a stable fund and insulated my gains to this point against future market meltdowns.  My contributions all still go to the same places and if I am right, a lot of folks may take "profit" from 401 plans which will mean lower markets soon.
Title: Re: Interesting 401-k Info
Post by: supsalemgr on February 09, 2013, 02:13:55 PM
At my stage I am into principal retention. The folks I work with look for short term fed bonds, mostly Ginny Maes,  that have a decent return for today's market. Fortunately, my situation makes this an OK deal. They are bewildered that interest rates have stayed this low.
Title: Re: Interesting 401-k Info
Post by: Bowhntr on February 09, 2013, 02:49:48 PM
I should have said I also insulated principal as well.  Like I said I moved 95% of the entire fund.  I've got about 18 to 20 more years to work so I will let the contributions ride for a while then make another large move somewhere down the road.
Title: Re: Interesting 401-k Info
Post by: supsalemgr on February 09, 2013, 03:30:07 PM
Quote from: Bowhntr on February 09, 2013, 02:49:48 PM
I should have said I also insulated principal as well.  Like I said I moved 95% of the entire fund.  I've got about 18 to 20 more years to work so I will let the contributions ride for a while then make another large move somewhere down the road.

With where you are keep taking advantage of that 401-k and the matches. Also, it might be a good idea to looking into a Roth. I was fortunate enough to have worked with a company that had both a 401-k and a defined pension plan. People in my age had choice to take a lump sum at retirement which I did. I could roll it into an IRA which has worked out well.
Title: Re: Interesting 401-k Info
Post by: Bowhntr on February 09, 2013, 05:23:04 PM
I set up a roth last year!!!
Title: Re: Interesting 401-k Info
Post by: TowardLiberty on February 13, 2013, 06:56:15 AM
Is putting your wealth in dollar denominated assets really a good idea?

Is no one concerned about maintaining purchasing power?

Sure, nominal gains look nice but preserving wealth is more important to me.

Title: Re: Interesting 401-k Info
Post by: rich_t on February 13, 2013, 02:38:42 PM
I need to decide if I want to stop funding my current traditional IRA and open up a new Roth to fund instead.  I have about 20 years to go until I retire.

I need to speak to a professional adviser on this.
Title: Re: Interesting 401-k Info
Post by: supsalemgr on February 14, 2013, 05:19:18 AM
Quote from: rich_t on February 13, 2013, 02:38:42 PM
I need to decide if I want to stop funding my current traditional IRA and open up a new Roth to fund instead.  I have about 20 years to go until I retire.

I need to speak to a professional adviser on this.

One certainly needs to talk with a CPA who can look at your current tax situation. The question is save money on taxes now (regular 401-k) or have money tax free when distributions begin (Roth IRA).
Title: Re: Interesting 401-k Info
Post by: Bowhntr on March 03, 2013, 06:19:04 AM
Even a ROTH is not "tax free".  Any dividends gained on the account are subject to taxation but all contributions are not.
Title: Re: Interesting 401-k Info
Post by: raptor5618 on March 07, 2013, 09:41:14 AM
I think I have this right.  The path I am following is based on some research I did and basically it said put your money into a 401K up to the point where your company does not match.  For additional savings it said to set up a Roth.   

I am not an adviser so what I say is my opinion and you need to figure out what is best for you.  But I would think that with at least 20 years until retirement, I am not so sure I would be putting everything into a safe type of fund.  If you did then you missed the recent run up in stock prices and missed that gain.  Not so sure now is the time to transfer as you would be coming late to the party.  It really is hard to pick the times where it will be good to be in the market and times when it will be bad.  In my experience, when you make that determination the up or down has already done its thing.  The bad think about my 401K is that when you move money out of an account it comes out at the end of the day.  I think this economy is ripe for a big down turn and I am not sure you will see it coming and by the end of the day it might be too late. 

But with 20 years take what happened since 2007 when it was at its last peak that we just beat.  If you had it in any fund  you took a beating.  However as the market dropped you were contributing to that fund and getting more shares per dollar.  When it hit its bottom you were buying shares that would increase a very nice percentage and you average cost per share has dropped.  So now we are back at the highest point ever which is kind of sad because it just beat a price that was set 6 years ago.   But through that time to now you would have profited a good amount.   It sucks to see the hit you took when it goes down but since you are not going to touch it for 20 years it pretty much does not really matter.   But it does take some fortitude to stay the course when you lost enough to have bought a new car. 

If you have less time then the plan is different because you might not have time to recover from a drop off.   
Title: Re: Interesting 401-k Info
Post by: Bowhntr on March 07, 2013, 12:45:49 PM
Kind of the same strategy I employed.  I took a huge hit when the market tanked, but I stayed put.  Like you said, I was buying more shares of the same fund for the same money and as things came back I pulled gains on more shares.  When things got close to pre-dip levels I moved 95% of all my funds into one stable fund.  However, that was a single move and ALL of my contributions continue to go to the original funds.  the stable fund will simply now just sit and draw dividend.  If things stay good in another 10 years or so I may do the same thing again.
Title: Re: Interesting 401-k Info
Post by: JTA on March 16, 2013, 11:44:17 AM
I just started contributing to my 401K about six months ago. Right now I'm contributing about 5% of my income. I'm getting the max company contribution at the moment which is what I was aiming for. I was planning on knocking it up to 10% but I'm not too sure. I was thinking maybe it would be better to instead set that additional 5% aside to pay off loans (school, auto, etc.).

Any suggestions?
Title: Re: Interesting 401-k Info
Post by: Solar on March 16, 2013, 12:54:33 PM
Quote from: JTA on March 16, 2013, 11:44:17 AM
I just started contributing to my 401K about six months ago. Right now I'm contributing about 5% of my income. I'm getting the max company contribution at the moment which is what I was aiming for. I was planning on knocking it up to 10% but I'm not too sure. I was thinking maybe it would be better to instead set that additional 5% aside to pay off loans (school, auto, etc.).

Any suggestions?
I cashed out long ago, sometimes it better to find something that will go up in value faster, things like copper when it's cheap, only to unload it later when it sky rockets.

Thing is, it looks like the stock mkt bubble may be at it's peak, and we know what happens after that.
So if your 401K is tied in there, it will take quite a hit. Is there some other avenue you could go with your companies help?
Ask your HR dept, or finance and see if they have any suggestions.
Though paying off bills may go a lot further in the long run.
Good luck and welcome to the forum.
Title: Re: Interesting 401-k Info
Post by: JTA on March 16, 2013, 03:16:08 PM
Quote from: Solar on March 16, 2013, 12:54:33 PM
I cashed out long ago, sometimes it better to find something that will go up in value faster, things like copper when it's cheap, only to unload it later when it sky rockets.

Thing is, it looks like the stock mkt bubble may be at it's peak, and we know what happens after that.
So if your 401K is tied in there, it will take quite a hit. Is there some other avenue you could go with your companies help?
Ask your HR dept, or finance and see if they have any suggestions.
Though paying off bills may go a lot further in the long run.
Good luck and welcome to the forum.

Thanks!

I'm not too worried if the 2k I've stashed away in my 401k thus far takes a hit :).

What are some other options to consider for saving for retirement?
Title: Re: Interesting 401-k Info
Post by: Solar on March 16, 2013, 03:24:43 PM
Quote from: JTA on March 16, 2013, 03:16:08 PM
Thanks!

I'm not too worried if the 2k I've stashed away in my 401k thus far takes a hit :).

What are some other options to consider for saving for retirement?
Myself, I got out of the Mkt decades ago and started buying things cheap that I knew I could sell later, but one thing you might consider is trends and the latest technology.
Look at where mkts are trending and find a strong company that is focusing on what you consider to be the next big thing.
If I was younger, I'd buy a small fleet of remote controlled drones and approach some of the larger real estate agencies and offer aerial views of their properties for potential customers to view.
For under a grand you could start tomorrow, just give some kids the addresses, a few drones and let them play, pay them nothing since it was a challenge (something kids love) as to who could get the best pics, and give the winner $20.00.
You're in business.
Title: Re: Interesting 401-k Info
Post by: JTA on March 16, 2013, 07:23:15 PM
Quote from: Solar on March 16, 2013, 03:24:43 PM
Myself, I got out of the Mkt decades ago and started buying things cheap that I knew I could sell later, but one thing you might consider is trends and the latest technology.
Look at where mkts are trending and find a strong company that is focusing on what you consider to be the next big thing.
If I was younger, I'd buy a small fleet of remote controlled drones and approach some of the larger real estate agencies and offer aerial views of their properties for potential customers to view.
For under a grand you could start tomorrow, just give some kids the addresses, a few drones and let them play, pay them nothing since it was a challenge (something kids love) as to who could get the best pics, and give the winner $20.00.
You're in business.

Man if only I had the time!

I've been wanting to stick a little bit of money in the stock market to see what I can do. I've played around with stock simulators and did decent, probably mostly luck though. I need to bust out some books for a refresher.

What's a good strategy for choosing stocks? Last time I played around with the stock simulators I "invested" in stocks I narrowed down with Google finance based on a few parameters I decided were important. The stocks did pretty good over a year period.
Title: Re: Interesting 401-k Info
Post by: supsalemgr on March 17, 2013, 06:09:02 AM
My personal view is that one should place the % necessary to attain the company match as that is "free" money. After that amount I am of the school to pay off debt, especially student loans and credit cards. Then one must decide between a traditional and and a Roth IRA. Each person and their circumstances are different. I personally believe one should find an adviser that understands your goals and not just churning trades.
Title: Re: Interesting 401-k Info
Post by: JTA on March 17, 2013, 07:14:30 AM
Quote from: supsalemgr on March 17, 2013, 06:09:02 AM
My personal view is that one should place the % necessary to attain the company match as that is "free" money. After that amount I am of the school to pay off debt, especially student loans and credit cards. Then one must decide between a traditional and and a Roth IRA. Each person and their circumstances are different. I personally believe one should find an adviser that understands your goals and not just churning trades.

Yeah good point. I think that's the route I'm going to take. I can have all my debts paid off  (aside from house payments) within the next year and a half if I go that route. Thanks.
Title: Re: Interesting 401-k Info
Post by: Solar on March 17, 2013, 07:25:50 AM
Quote from: JTA on March 16, 2013, 07:23:15 PM
Man if only I had the time!

I've been wanting to stick a little bit of money in the stock market to see what I can do. I've played around with stock simulators and did decent, probably mostly luck though. I need to bust out some books for a refresher.

What's a good strategy for choosing stocks? Last time I played around with the stock simulators I "invested" in stocks I narrowed down with Google finance based on a few parameters I decided were important. The stocks did pretty good over a year period.
Granted, this mkt is different than the one before the bailout, it is also riskier and even less of a chance of making any real profit.
Check this out.

After 100 contests, the results were in. From Investor Home's great description of the contest:

    On October 7, 1998 the Journal presented the results of the 100th dartboard contest. So who won the most contests and by how much? The pros won 61 of the 100 contests versus the darts. That's better than the 50% that would be expected in an efficient market. On the other hand, the pros losing 39% of the time to a bunch of darts certainly could be viewed as somewhat of an embarrassment for the pros. Additionally, the performance of the pros versus the Dow Jones Industrial Average was less impressive. The pros barely edged the DJIA by a margin of 51 to 49 contests. In other words, simply investing passively in the Dow, an investor would have beaten the picks of the pros in roughly half the contests (that is, without even considering transactions costs or taxes for taxable investors).

    The pro's picks look more impressive when the actual returns of their stocks are compared with the dartboard and DJIA returns. The pros average gain was 10.8% versus 4.5% for the darts and 6.8% for the DJIA.

So isn't this a victory for professional stock experts? Malkiel says no. He and a number of other commentators point to a number of factors affecting the results, including:

    The Announcement Effect: by announcing the stocks to the entire audience of the WSJ, it will artificially inflate the returns (in fact, abnormal gains for the first 2 days after publication scaled back between 15 and 25 days later).
    Pros picked riskier stocks: Case Western Reserve University professor Bing Liang says that, adjusted for risk, the pros' would have lost 3.8% on the market over the six-month period.
    The Dartboard stocks continued to do well: After the contest ended, the dart stocks continued to perform, while the pros' picks fell from their initial highs after publication.
http://www.investorhome.com/darts.htm (http://www.investorhome.com/darts.htm)