Retirement Plans
By Barry Ritholtz - November 19th, 2008, 6:30PM
via Randy Glasbergen
We all agree that pessimism is a mark of superior intellect. —John Kenneth Galbraith
Macro Notes
Jobless ClaimsPeter Boockvar
Initial Jobless Claims totaled 614k, 1k less than expected but the prior month was revised up by 3k to 630k. Continuing Claims fell by 53k from last week and was 38k less than expected. There has been a big discussion of late over the expiration of unemployment insurance and how the recent drop in Continuing Claims is due to people losing it rather than finding a new job. While there is no question benefits are expiring without one finding a job, as evidenced by the rising exhaustion rate, many losing those benefits now started getting them when initial claims were...
read more »
The Big Picture is proudly powered by
WordPress
Entries (RSS) and Comments (RSS).
Entries (RSS) and Comments (RSS).
November 19th, 2008 at 6:34 pm
Thank god I have 30 yrs. I have all my 401k riding in the S&P500. I know it sounds dumb but it’s the best place I can put it. The other choice is a bond fund and I don’t know if that has any value either. Cash or personal choices are not possible with either Wachovia (mine) or TIAA-CREF (wife). What was the biggest stock index during the depression and what was the percentage of that that went to $0?
November 19th, 2008 at 6:46 pm
“The drop in demand led to a decline in prices: The Consumer Price Index (CPI: a measure of overall prices) fell 2.6% in 1930 and 9% in 1931. By the time the economy hit bottom in 1933, consumer prices had fallen 18% from their 1929 level.” Source - http://homepage.smc.edu/szekely_claudia/E2Information/great_depression.htm
We fell 1% in Oct. We are heading this way.
November 19th, 2008 at 6:55 pm
People didn’t really retire back then. If they didn’t have significant savings and were no longer able to work it was move in with the kids or some kind of charity. The whole idea of ‘retirement’ was invented by politicians to reduce the pool of idled laborers which always result from government meddling in the markets. People who don’t have jobs have lots of time and inclination to separate politician heads from politician bodies. Their other great idea to reduce the unemployment they always cause is war… but that can be unpredictable and result in the aforementioned negative consequences. (Ask Benito and Adolph.) Stocks are really terrible places to save money for most people. The only reason sensible people are driven to do it is to try to beat inflation… another government program.
November 19th, 2008 at 7:00 pm
That is really funny! Even if you did put something away for retirement your still screwed. LOL.
November 19th, 2008 at 7:04 pm
jm - I think you might mean 201k soon approaching just “k”.
November 19th, 2008 at 7:25 pm
Maybe 201 soon but not yet. I had the foresight Nov 07 to go into bonds 100%. I put it back into the S&Ps when it looked like major banks would go under and AAA rated companies were incorrectly rated. That made the 80% AAA/Gov’t bond fund the same risk as the market, at least to me. I’m down around 30% now but have 30 years to go.
We are already missing now 6 or 7 of the S&P500 stocks right? That puts about 1.4% to $0.
November 19th, 2008 at 7:27 pm
Oh, I also had the foresight to go 100% S&P500 after the 9/11 attack where I was about 80/20 stocks to bonds. So overall I’m ahead but I will definately lose a good chunk perhaps.
November 19th, 2008 at 8:06 pm
Guys, don’t worry about your retirement. As a registered Republican, I just love how all these GOP spokespeople keep asking where the Democrats are going to get money for all the programs (energy, health, Social Security) they promised the American people. There is this GOP clown right now on Hardball proclaiming, “SHOW ME THE MONEY!” as if he were some Mr. Smarty-Pants. I love the obfuscation. There is not going to be more borrowing. There is no whiz-bang rocket science budget wizardry. We are not talking about the complexity of Einstein’s 1905 papers here.
The Rich People of the United States of America have lived fat and happy for the last 28 years with my political party’s successful assault against the marginal tax rates on the highest tax brackets of our nation. I have started to recognize the wealthy as that nice national piggy bank that we all have been putting our coins in for 28 years. There is more money within the wealthy of this country than anywhere else on Earth, worth more than all the oil in Saudi Arabia. Now, it is time to…crack the bank. The elites on both sides have been fighting for nearly three decades over this issue, and finally, enough working folk saw through the abortion smokescreen and other GOP manufactured issues designed to divide the proletariat that a LIBERAL was elected…oops…along with a liberal dominated Congress.
The vicious McCain-Palin campaign was not about race or terrorism or Communism, folks. It was about taxes. Don’t worry, keep voting against me and my political party, and enjoy our “savings” and look forward to a nice retirement.
November 19th, 2008 at 8:07 pm
This will really make those Republican vs Democrat stock market performance numbers even more skewed.
November 19th, 2008 at 8:55 pm
@ jmborchers
I’m also in TIAA-CREF from my years working at a university. I went mostly into CREF inflation-linked bonds last summer and am now out 5% for the year. But I do have a money market option. What is a shocker (to me) is that of the 10 options available to me, the CREF Real Estate is only down 2% for the year. I also can’t figure out how the CREF Social Choice option “only” lost 27% while the equity index (& other options) are off ~40%.
My husband’s rollover 401K has been beaten down so badly that he’s given up, rolled it over, and essentially uses the account for daytrading.
We do have another 25-30 years before we retire penniless and move in with our children.
November 19th, 2008 at 9:01 pm
VennData Says:
“This will really make those Republican vs Democrat stock market performance numbers even more skewed.”
Yes, it is almost certain now that W will go down in history as the 21st Century’s Hoover! What a fitting legacy for a failed presidency that should never have happened in the first place.
It is well deserved justice because, IMO, this administration has been a disgrace to what once was the greatest nation on earth: the swaggering, the “bring ‘em on”, the arrogance, the lying before Iraq, the “shock and awe” and collateral damage killing of civilians, the “Mission Accomplished”, the 4000 dead and tens of thousands maimed because of those lies, the fear mongering, the dissing of the French and anyone else with the balls to disagree, Karl Rove’s dirty tricks, the budget deficits and the looting of the Federal coffers by the drug companies, the $100s of billions in bailouts, the pain caused by this collapse of the free-market experiment, and on and on.
Although that is all so very sad, it warms the cockles of my heart to see them humiliated now, while they are still in office. And to see them hand-off power to a black Democrat and to a nearly filibuster proof Democratic congress, well that is just priceless! How far the prideful have fallen; how sweet it is to see.
Neo-conservatism, as is the fate of all extreme ideologies, is now relegated to the dustbin of history.
Let the restoration of the USA begin!
November 19th, 2008 at 9:06 pm
Crikey! I thought you guys were older than me. I hope to be pretty much retired at 65 and that’s only 23 years away for me. I mean you need to have invested income you can live on by that time don’t you? Actually I think those of us with 20 years ahead and a bit of capital in the bank and a bit of investing knowledge have few excuses. There will be great opportunities ahead just need to protect the capital you’ve got and keep saving.
November 19th, 2008 at 9:24 pm
well you know retirement has probably always been a crap shoot since we transitioned to 401K. replacing those dependable pensions. if you are lucky, the year you plan to retire might still happen. but it will mostly be the luck of the draw if it happens that year. or 10 years later. or at all.
November 19th, 2008 at 11:04 pm
I about 24 years from retirement. I was 50% foreign equities, 20% Energy, 20% other and 10% fixed income. As of now, I’m probably down 45%. Last year was good, but this year definitely gave it all back and then some.
Luckily, I work for the state and am in the defined benefit pension plan. As long as they don’t take that away from me, I might get to retire on time.
November 20th, 2008 at 1:07 pm
YIKES! I forgot to have children!
So, that explains all these newly “married” guys running around with kids strapped to their chests.
And I thought they were just using them as fashion accessories.
Who knew they were part of gay retirement planning.