Retirement Account

[Undertoad]

A quickie then. Figure that the average person spends 45 years working and 15 years in retirement. The average retirement fund money is in the market for 30 years.

Pick any 30 years on this chart. This is the Dow Jones industrial average, a set of average stocks that is often tracked. We are now at the bottom of a very volatile market, so hell, pick the last 30 years if you like. This is the average retirement investment. If people cash out now, completely, they are only going to make a small fortune and not a huge one. If they can hold off cashing out big for 4-5 years it will be a huge fortune again.

This chart does not even include the results of reinvestment of earnings, compounding interest or making smarter than average investments. My momma, for example, took all her retirement funds out of the market in 2007, because she is a brilliant investor.

[tw]

Originally Posted by Undertoad

This chart does not even include the results of reinvestment of earnings, compounding interest or making smarter than average investments.

Chart also would be far more useful to the lurker if its verticle axis was logrithmic - not linear.

[Undertoad]

[TheMercenary]

Originally Posted by Undertoad

*smiles* Her little plan was to earn 3% annually... how it earns, we are not told. The market earns people 7% on average, and more than 3% even if they buy at the top and sell at the bottom, and how it earns is well understood.

Inflation at 5% would pretty much ensure that her plan would fail. Either way, they are going to find a way to come after the earnings and savings of others to fund the multitude of programs and promises made in the last 6 months.

[TheMercenary]

Originally Posted by DanaC

*smiles* this thread shows the fundamental cultural and political difference between myself and most Americans. I read that article and was reassured on behalf of workers whose pensions have reduced due to the financial crisis, that their future income was to be secured by taking into government hands and away from the private sector which is rapidly shrinking their worth. lol. Just talking about instinctive reactions.

Future income in insured but not panicing and leaving your money right where it is until the market recovers. That is unless you are investing in individual stocks and bonds, then you better take hard look at where you money is and move it before some of these places go belly up. GMAC bond comes to mind.

[xoxoxoBruce]

Originally Posted by Undertoad

A quickie then. Figure that the average person spends 45 years working and 15 years in retirement. The average retirement fund money is in the market for 30 years.

I don't know anybody that's average.

[lookout123]

When creating retirement plans I need to plan for at least a 30 year retirement or I haven't done my job. Unless you can tell me with certainty what day you plan on dying.

[TheMercenary]

All I can say is that I am glad I am not near retirement and that the market is so low that it allows me to buy some 40% more stocks than I have in the past.