How Closely Do You Monitor Your 401k / Retirement

[RamblingMad]

Everyone has a different risk tolerance. Personally, I found that I could tolerate more risk as I educated myself more on investing, but that might not be what works for you. The important thing is, you've gotten started--good for you!

Also, know that 2019 was an amazing year for the stock market--yay for all those invested in it! There's no guarantee that 2020 will do the same...or, it could do better, ask me in a year! Just know that it's not typical to have the kind of fabulous returns the past year has had.

It really wasn’t that great. Most of the increase had to do with the drop in December 2018. Over the last two years, the market is only up 20ish percent.

 

[morgan98]

I have most mine in low/no risk also. I do have some in higher yield/higher risk. The risk is what stopped me from getting a IRA earlier. I’m only a couple months in and only a couple hundred invested. We’ll see how it goes.

I just wanted to make a point that an IRA in and of itself is not risky. An Individual Retirement Account has laws and tax consequences surrounding it such as how much you can contribute a year pre-tax, or can you do a post tax Roth (there are limits based on who can participate based on income levels.

However, you can have an IRA in something as low risk as a CD at a bank.

 

[tvguy]

It really wasn’t that great. Most of the increase had to do with the drop in December 2018. Over the last two years, the market is only up 20ish percent.

Laughing as I am reading this with a new episode of Judge Judy on. A brother suing his brother over stock investments, with Judge Judy telling the defendant "you're an idiot if you can lose money in the biggest boom market in 40 years". Her statement, not mine.

 

[runwad]

Most people don't understand that an IRA is just a basket, you can fill it with what you want, a cd, a savings account, stocks, mutual funds, etc.

https://www.ira-basics.com/what-types-of-investments-can-you-use-in-an-ira/

 

[disneychrista]

Most people don't understand that an IRA is just a basket, you can fill it with what you want, a cd, a savings account, stocks, mutual funds, etc.

Good to know. You are right, I had no clue. I thought it was mutual funds & stocks with risk.

I have a couple CD's because it paid better than a basic savings account.

I did not have any role models when it comes to retirement savings. My parents had no retirement savings (401k, IRA).

 

[DLgal]

It really wasn’t that great. Most of the increase had to do with the drop in December 2018. Over the last two years, the market is only up 20ish percent.

"Up only 20%"

The average is 8% since inception. Anything above that is gravy.

 

[hertamaniac]

There's no guarantee that 2020 will do the same...or, it could do better, ask me in a year! Just know that it's not typical to have the kind of fabulous returns the past year has had.

Agreed. This is why I sweep profits once they reach a certain level. For last year in my equities trust account, I pulled the trigger once the returns went north of 25% and dumped into a CD. Rinse and repeat.

 

[tvguy]

Agreed. This is why I sweep profits once they reach a certain level. For last year in my equities trust account, I pulled the trigger once the returns went north of 25% and dumped into a CD. Rinse and repeat.

I'm in annuities. As long as I take the structured payments starting at age 65 and don't pull out chunks of money, my gains are locked in.

 

[hertamaniac]

I'm in annuities. As long as I take the structured payments starting at age 65 and don't pull out chunks of money, my gains are locked in.

I'll convert my trust cash positions into annuities once I reach 62/65, but am more than happy to leverage my equities to their cost basis with double digit returns YoY to build up the cash until then.

 

[tvguy]

I'll convert my trust cash positions into annuities once I reach 62/65, but am more than happy to leverage my equities to their cost basis with double digit returns YoY to build up the cash until then.

I'm 62 1/2 and hope to retire in 6 months.

 

[hertamaniac]

I'm 62 1/2 and hope to retire in 6 months.

Got it....that's the difference. I've got over a decade to build up the cash account before 62.5 and then go the annuity route.

 

[RamblingMad]

Why go the annuity route? Couldn’t you just buy a 20 or 30 year treasury bond?

One of my friends lives off REIT income.

There are a lot of approaches without locking in your money.

 

[hertamaniac]

Why go the annuity route? Couldn’t you just buy a 20 or 30 year treasury bond?

I can think of 2 reasons/cons for the bond route (non-treasury):

1. Default risk. The company or municipality could stop making payments.
2. Fewer options than annuities for how and when to receive interest earnings.

 

[RamblingMad]

I can think of 2 reasons/cons for the bond route (non-treasury):

1. Default risk. The company or municipality could stop making payments.
2. Fewer options than annuities for how and when to receive interest earnings.

If the US defaults, then you have much bigger problems.

 

[hertamaniac]

If the US defaults, then you have much bigger problems.

That's why I said non-treasury.

 

[RamblingMad]

That's why I said non-treasury.

I just can’t get head around ever wanting to put money in an annuity. What’s the upside?

 

[NYCgrrl]

I just can’t get head around ever wanting to put money in an annuity. What’s the upside?

An annuity primer that lists pros and cons. Read it and decide if it works for you or not:

https://money.cnn.com/retirement/guide/annuities_basics.moneymag/index4.htm

 

[tvguy]

Why go the annuity route? Couldn’t you just buy a 20 or 30 year treasury bond?

One of my friends lives off REIT income.

There are a lot of approaches without locking in your money.

There are many approaches. We are "balanced" with a mix of investment options. Half in annuities, half in other investments. Our full Social Security at 66 1/2 will nearly be what we bring home today. Throw in the annuities, we will actually be bringing in $2,000 a month more without touching our other investments. It is the track our financial adviser put us on. And it is the track my mom was on and it served her very well since she lived to age 90. When she passed away and I had to notify the annuity company, after telling me how sorry she was about mom passing, she said "your mom made a whole lot of money off us"

 

[hertamaniac]

I just can’t get head around ever wanting to put money in an annuity. What’s the upside?

You can set-up a compliant annuity in the event you need to convert cash without subjecting it to a/the look back period (based on my experiences). This is a very legalistic route.

 

[MillauFr]

If the US defaults, then you have much bigger problems.

Agreed. I would think the annuity companies going into default is far more likely that the US Treasury. How on earth can the US Treasury default anyway? I would think they would just print more cash in order to cover any payments due if things got really bad.