Republican/conservative economic theory proven wrong

Discussion in 'Politics & Current Events' started by superdave, Sep 17, 2012.

  1. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    I assume that you mean in case of death at a relative young age.

    But still a crash of the market for 401K is still better than nothing.

    Now a surviving spouse still gets S.S. (I disagree with this) from the deceased spouce and I believe Children under 18 still get to collect part of the parent S.S. in case of death.
     
  2. stanger

    stanger BigSoccer Supporter

    Nov 29, 2008
    Columbus
    Club:
    Columbus Crew
    Nat'l Team:
    United States
    Shouldn't be my problem.

    That's the point.
     
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  3. bigredfutbol

    bigredfutbol Moderator
    Staff Member

    Sep 5, 2000
    Woodbridge, VA
    Club:
    DC United
    Nat'l Team:
    United States
    Sorry, I didn't pay attention at first to the you being the employer part. Agree w/that.

    Jumped into the discussion headfirst.
     
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  4. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    Yes, stanger, it should. The whole world's problems should be yours. Until Urban Meyer gets results again, or you change your avatar, I'm gonna blame you for all of it. Get to work!

    :p
     
    stanger repped this.
  5. Timon19

    Timon19 Member+

    Jun 2, 2007
    Akron, OH
    I'd call beating M*ch*g*n yet again in M*ch*g*n's best year in what seems like an eternity a result. Getting to play in the national semi-final a full year ahead of schedule (I don't think too many actually expected them to get a top 4 spot, and they're young) also seems pretty decent.

    Your complaint is therefore invalid and you should lick stanger's boots for one week.
     
  6. American Brummie

    Jun 19, 2009
    There Be Dragons Here
    Club:
    Birmingham City FC
    Nat'l Team:
    United States
    They didn't even score, Timon. When was the last time the Big Ten representative in a bowl game failed to even score.

    #imnotreadytomakenice
     
  7. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia
    No, I meant overall. If you are to retire soon and the market crashed, you'd suffer and may need to rely more on SS. Regarding spouses and children, I think it is a great provision, that prevents families to lose suddenly a substantial part (if not all) of their income. Imagine how many homeless families we would have without that measure.
     
  8. Timon19

    Timon19 Member+

    Jun 2, 2007
    Akron, OH
    The Score That We Shall Not Speak shall not be spoken of.

    No one expected this at the beginning of the year except for pundits whose job it is to suck off the big schools every year.
     
  9. Cascarino's Pizzeria

    Apr 29, 2001
    New Jersey, USA
    I definitely subscribe to this theory. Was just fixing my wife's power steering in the driveway in the bitter cold. Minivan with $170K on it.

    One day I might splurge on the midlife crisis car. But not anytime soon.
     
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  10. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Only if you are dumb and keep your 401K in high growth high risk stock towards the end of your retirenment.

    By the time you turn 55 you should start switching you stock mix to more low growth lower risk bonds and utilities type holdings.

    Then again we did elect Trump, so we can be very dumb.
     
  11. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia
    And we also overspend on cars and believe in trickle down...

    But all in all, 401k are not ideal for several reasons:

    1. Most people do not make enough money to invest on them.

    2. Most people is financially illiterate.

    3. Some (most?) funds charge high managing rates.

    4. Fund managing companies are not necessarily working for you, and/or know the market that well..

    5. There is an inherent risk that combined with the above could trim the value of investments if the timing is wrong.


    Again, I'm not all against 401k (as a matter of fact at this particular point in time, I'm benefiting from it) but I do think that they need to be changed in ways that benefit more people and lower the risks. Otherwise, maybe is better to just increase your SS contributions and benefits.
     
  12. VFish

    VFish Member+

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    dapip, I don't think you understand how 401ks work. They all offer low risk options and most now offer auto-pilot 'Target' funds where you can simply pick a fund based on your projected target retirement date. They also offer very low entry barriers so anyone can afford to invest in them if a 401k is available to them, Social Security also offers risk, i.e. if you die before you reach retirement you get nothing.
     
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  13. VFish

    VFish Member+

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    That is the way the system is designed to work. A big component in SS is insurance.
     
  14. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia
    I'm not a financial guru, not a complete idiot but I find the complexity and amount of options perplexing some times, and most the information I get from a 12 page quarterly report from my wife's and my plan. As I've said before, we are doing fine (based on same reports) and (if SS is still available in 2 decades), we should have a very comfortable retirement.

    Yes, you can play safer as you near retirement, but being still 20+ years from retirement, we're supposed to still take some risk that could wipe out a lot of value from our investments, if things don't go well will make it harder to do what we want to do.

    Regarding the "low entry barriers", that assumes that you can save 3% or more of your paycheck, which is not feasible to a lot of people. And SS will still pay your widow and/or underage children if you die.
     
  15. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    If you do not like volatility just put your 401K in government bonds.


    Obviously the safer you make the stock the less growth you will get on average.


    My 401K took a huge hit in 2008 and later (not that I had a lot invested at that time), but that also means I was buying cheaper stocks after the crash. If you did not touch your 401K and just rode the market your 401K has probably recovered very well in the last few years.
     
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  16. Cascarino's Pizzeria

    Apr 29, 2001
    New Jersey, USA
    #1316 Cascarino's Pizzeria, Jan 9, 2017
    Last edited: Jan 9, 2017
    True if you have savvy execs in your company that do their due diligence, have an investment committee and select a good 401(k) provider that offers diversified/low-cost investment options. Target dates are popular but they're still not required. And say you started saving late on life. The 2035 fund glidepath may be too conservative for your needs. Everyone's situation is different.

    Many non-profits and school districts use high fee annuity-based investment options that are double the cost of the average mutual fund in some cases.

    If you think your plan stinks, talk to your HR dept. and see if they'll consider improving it. A job I had many years ago matched the employee's deferrals with company stock (google "401(k) stock drop cases" to see what can go wrong. Or just recall the Enron debacle). Yeah you could go in and change your investment. But the company was relying on people being people and not switching. I thought this matching scheme was BS and made sure to switch. The company's stock was basically flat for my tenure there.
     
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  17. VFish

    VFish Member+

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    FWIW dapip, here is my advice. You've got a long term horizon (20 years), so find the S&P 500 index fund and put your money there. If you are uncomfortable with all your money in the stock market and find the 2037 target fund and put your money there. Set it and forget it and reevaluate in 10 years.

    If no target fund is available you'll have to calculate an appropriate stock/bond ration and distribute your money accordingly and revist and rebalance yearly.

    It really isn't that hard.

    As for a 3% entry barrier, if someone is unwilling or unable to invest 3% of thier income toward retirement they aren't going have a very happy retirement anyway, but there are still IRA options that allow you to set up low cost accounts for a pittace.
     
  18. VFish

    VFish Member+

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    The company match is free money regardless if it is in company stock. A word of advice though, NEVER, EVER PUT YOU OWN 401K MONEY IN COMPANY STOCK! You would be wise to move out of company stock once any vesting requirements are met.
     
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  19. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia
    I'm perfectly aware of that.

    This almost perfectly describes my investment history.
     
  20. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Unless you are a trader or less than 10 years away from retirement, this is the history of basically everyone with a 401K since 2008.
     
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  21. dapip

    dapip Member+

    Sep 5, 2003
    South Florida
    Club:
    Millonarios Bogota
    Nat'l Team:
    Colombia
    Funny story: My brother used to work for a large developer that offered stock as part of the compensation. During the boom their stock value surged and some people got to have millions and were vested. In early 2007 my brother kept telling them to cash out (he had a vantage look at the company numbers). I think just a few listened to him. Most just saw the company go under and most of their stock value disappear.
     
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  22. Cascarino's Pizzeria

    Apr 29, 2001
    New Jersey, USA
    Most cases you'll be OK. But Enron bigwigs knew how F'd up the company was and still encouraged employees to invest in company stock. Too risky for me and if I was a company I wouldn't want the exposure from any bit in the ass enployees. Employees will even sue nowadays if the employer doesn't negotiate for the best share class in the plan. Employers have to be on their toes.
     
  23. Q*bert Jones III

    Q*bert Jones III The People's Poet

    Feb 12, 2005
    Woodstock, NY
    Club:
    DC United
    How many times has the CEO of USA, Inc. declared bankruptcy? How many times has the Congress come razor close to choosing to default on its debt? That safe bet doesn't seem so safe right now.
     
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  24. ceezmad

    ceezmad Member+

    Mar 4, 2010
    Chicago
    Club:
    Chicago Red Stars
    Nat'l Team:
    United States
    Yet the T-bonds interest are low.

    Sure the Tea-Party may not want to go along with the President spending plan and refuse increase the spending limit. I doubt it, a party only cares about a balanced budget when the other party controls the white house.
     
  25. VFish

    VFish Member+

    Jan 7, 2001
    Atlanta, GA
    Club:
    Atlanta
    Stock options are a completely different beast than a 401k stock match. You will not find stock options in a 401k. But your anecdote is valid. On the flip side I know some programmers with options grants that sold at first chance in order to put in a pool or by a new car while secretarys with a lot fewer options sold later to by houses or retire.
     

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