How Closely Do You Monitor Your 401k / Retirement

[RamblingMad]

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.

What’s the benefit over alternative investments? I’m trying to understand why someone would choose an annuity.

 

[hertamaniac]

What’s the benefit over alternative investments? I’m trying to understand why someone would choose an annuity.

Read this and it should answer why a certain type of annuity, for some situations, offers an advantage over treasury bonds. Does a treasury bond offer something similar to this?

https://money.usnews.com/money/retirement/baby-boomers/articles/what-is-a-medicaid-annuity

 

[NYCgrrl]

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.

Printing more money is a fast track to hyper inflation. You need to have something to back it up. Think back to the stories about people buying a loaf of bread with a suitcase of money at the end of WWI in Germany. A more recent example would be modern day Venezuela.

 

[RamblingMad]

Printing more money is a fast track to hyper inflation. You need to have something to back it up. Think back to the stories about people buying a loaf of bread with a suitcase of money at the end of WWI in Germany. A more recent example would be modern day Venezuela.

Not true. Read up on the liquidity trap. It’s covered at the graduate level, so a lot of folks aren’t aware of it.

 

[MillauFr]

Printing more money is a fast track to hyper inflation. You need to have something to back it up. Think back to the stories about people buying a loaf of bread with a suitcase of money at the end of WWI in Germany. A more recent example would be modern day Venezuela.

The US Federal Reserve flooded the economy with 4.5$ Trillion in manufactured cash during the last economic crisis. There were calls that this would lead to ruinous inflation. None of that happened.

 

[RamblingMad]

Read this and it should answer why a certain type of annuity, for some situations, offers an advantage over treasury bonds. Does a treasury bond offer something similar to this?

https://money.usnews.com/money/retirement/baby-boomers/articles/what-is-a-medicaid-annuity

If you’re net worth is at the fringe for Medicaid, then I can see how this makes sense. I’m estimating to have north of $5 million, so I struggle with this approach.

 

[hertamaniac]

If you’re net worth is at the fringe for Medicaid, then I can see how this makes sense.

Not true. It is the spend down amount if you want to qualify for Medicaid that is the driver of this approach (convert $X). The question ultimately is do you want to qualify for government assistance or deplete your internal resources hoping that it is sufficient to end of life. That's a question for each individual.

 

[NYCgrrl]

Not true. Read up on the liquidity trap. It’s covered at the graduate level, so a lot of folks aren’t aware of it.

Still true as you need other factors (interest rates, high rate of savings, etc) for the liquidity trap to be managed. It's not a norm as described in Economics 101 since it's preferable that it doesn't happen. More so a solution to a problem.

 

[Ariel484]

We check things quarterly, but we're in our 30s. I imagine we'll check more as we get closer to retirement.

 

[tvguy]

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

Diversification. Investing 101. I (or my heirs) will get all the money and growth back , an if I live long enough, I will get more than I am entitled to.

 

[RamblingMad]

Diversification. Investing 101

But is it really? If it’s buying the same equities as your other investments, are you really diversified?

 

[tvguy]

But is it really? If it’s buying the same equities as your other investments, are you really diversified?

Well, I haven't noticed a single duplication between the annuity and my other funds., But I could have missed one.

 

[RamblingMad]

Well, I haven't noticed a single duplication between the annuity and my other funds., But I could have missed one.

What is your annuity invested in?

 

[tvguy]

What is your annuity invested in?

I don't have the prospectus in front of me. It is through Fidelity. My 401k is through Vanguard. I also have some with Lincoln.

 

[Jenniebee]

I check my 401K about once a month, maybe every other month. When I log on they used to show me a pie chart of my investments, my investment is broken up into about 6 different fund types. The pie chart would show my percentages how much I was allocated in each one, and it would tell me the growth over the quarter. So for example it showed the performance of one was 3% growth, while the performance of another was 6% growth. I would use this info to adjust the mix of the funds. Then my employer changed the B2B partner for the 401K and the new dashboard does not show this anymore. So I no longer know if I should be moving things around. There is an option to get advice on this from the B2B partner, but this is a paid service. I am open to suggestions on how to manage this.

 

[Searc]

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.

That isn't quite how it works.

 

[mrodgers]

The US Federal Reserve flooded the economy with 4.5$ Trillion in manufactured cash during the last economic crisis. There were calls that this would lead to ruinous inflation. None of that happened.

Normal people disagree. Can't buy a car any more, they are unaffordable. Can't buy a house any more, they are unaffordable. Can't eat, groceries are unaffordable. Just about everything has become unaffordable to someone in the actual middle vs. prior to 2008.

 

[ThistleMae]

When I looked at my minimum amount I have to take our at 70 1/2, I will be paying that amount in taxes based on my pension and SS. It seems that all of my extra income will go to taxes. Does that seem possible? I feel so defeated.

 

[runwad]

When I looked at my minimum amount I have to take our at 70 1/2, I will be paying that amount in taxes based on my pension and SS. It seems that all of my extra income will go to taxes. Does that seem possible? I feel so defeated.

Yes it is quite possible, read this https://www.kiplinger.com/slideshow...TduKpnwEML5QbGsZNJDKa5bD1kw3ajhBl2oLPMoT4aGok

 

[RamblingMad]

When I looked at my minimum amount I have to take our at 70 1/2, I will be paying that amount in taxes based on my pension and SS. It seems that all of my extra income will go to taxes. Does that seem possible? I feel so defeated.

This is why I have a normal investment account in addition to my 401k.