Couple of saving-related news stories which hit my inbox this afternoon:
EBRI: 2013 Retirement Confidence Survey Results
EBRI’s 2013 survey tells us that half of workers reported having $25k or less in total savings and investments (not counting home equity and any defined-benefit plans). Twenty-eight percent have less than $1,000.
FA Mag: Congress May Act to Stem Outflows from 401k Plans
That’s right, America: Not only do you not have jack squat in your retirement plan accounts, but what you do have, isn’t really yours, and won’t be until Congress says it’s okay for you to have it.
Carry on.
MikeM wrote:
Hello, Michael haven’t bothered you with a question in a while. I know you don’t promote yourself as a financial advisor, and you certainly don’t claim to have a crystal ball. That’s why I’d like to hear your thoughts as a thoughtful normal guy who thinks about money and security. You seem to have a less than rosy picture of retirement security , as do I, but are still a natural born or at least converted saver, as am I.
Does the Cyprus announcement bother you much? Do you think 401k’s are in any real jeopardy in the next decade or two? I’m dumping more than most would find reasonable from my modest income into my 401k and saving a lot in money markets accounts as well. While me, the wife, and kids aren’t suffering, we do pay a cost for all this saving (both missed opportunities and inflation), If someone someday decides to just up and take that from us, I can’t imagine how I would feel.
I’ll be getting an extra thousand dollars in my hands in a week or two. I originally planned to just toss it on the Emergency Fund heap, but then thought maybe I should do something else. I could open my first Roth, but to tell you the truth, I half believe between the massive federal debt and unlimited government intrusion, and endless money printing, that money will not be there for me unmolested in 25 years. Should I put on my tinfoil hat and buy 1/2 oz gold coin? Should I put it in the mattress? Buy some nice antique furniture? I have to say I’m clueless. Have you had any thoughts in this direction? Should I just put it in a mutual fund tracking an index and keep it away from ROTH, or IRA? I know its only 1,000, but its the first of hopefully more I have to think about in a new world where even nationally insured bank accounts (that loose to inflation) may be raided someday.
Thanks in advance for any reply.
Michael wrote:
Yeah, Cyprus bothers me. I tend to see it as a “test case” of sorts. How do people react? What happens when banks reopen, when they do? All this stuff is being watched and duly noted by governments around the world.
As for 401ks and retirement funds being in jeopardy, yes, they are/will be. It’s just a matter of time. As long as .govs around the planet have no desire to rein in spending, then those things which we like to think of as “safe” or “good investments” are really anything but.
MikeM wrote:
Sorry to keep pestering, but I still throw money into my 401K whole hog. I think I’m socking 20% of my gross into it. I expected the market to have ups and downs and to just ride through that without ever actually worrying for the next 5 or 10 years, but to get taxed or have the government take it giving me some promise of retirement security…
I know you are a saver have you give any thought at all to “alternative” investments? Or like I said taking the money but keeping it in non-retirement funds?
If you just don’t want to talk about it that’s fine but let me know.
Michael wrote:
Mike,
I’ve thought a lot about “alternative” investments, though what you’d call “alternative” and what I’d call “alternative” are probably different. To date, I have no physical gold holdings, but dearly wish that I’d looked into that years ago. Most all of our savings are in either bank or investment accounts, with a smattering of 401k / IRA / 529 stuff in the mix.
I’ve also “invested” in some “household protection” of various forms, as well as long-term storage of essentials (food, etc.) that’d keep us covered for periods of a month or so. And, of course, we keep a few shillings in the proverbial Bank of Sealy. But all it takes for those things to be useful is a super-nasty storm of some sort, which isn’t all that uncommon.