9/30/2008

Exactly What Is Wrong With Retirement

Once upon a time people who worked all their lives for their employer had a nice safe pension plans that allowed them to have a modest income after retirement paired with Social Security. Sure, you might not be rich, but you wouldn't be eating dog food for supper either.

Then the Republicans decided that they would convince people they were "empowered" and needed to invest in the stock market in order to "retire rich" and subsequently alleviate their friends from offering pensions while at the same time separating amateur "investors" from their hard won money.

Yesterday, the markets dropped 700 points because the fat cat friends who created the next Great Depression didn't get their way when they wanted the American taxpayer to cover their gambling debts.

Today, the good folks at the NY Times business page had this piece of advice for all the amateur investors who have to "play" the stock markets because the government has forced their retirement savings into stock heavy 401(k) plans (among other scams):

Continue to save. Big losses mean you’ll need that much more time, or good news, to bring your balances back to where they need to be for you to retire comfortably. If your employer matches your contributions, this is a great time to take advantage of the largess.

As for whether you should pile into beaten down stocks, no one knows how much further the markets will fall or how long they’ll take to bounce back. But people who move their savings to ultrasafe investments and then leave them there usually miss out on the gains when the markets come back. If you need to do that to sleep at night or avoid stomach ulcers, then do what you have to do. But it may cost you in quality of life come retirement time.

They further suggested that if you are about to retire, then you should wait so you don't "lock in your losses" during the downturn. After all, the good folks at the NY Times are absolutely convinced the American taxpayer will foot the bill for companies' losses on both sides of the coin, both in the markets and in the bailouts.

Meanwhile, back on Wall Street, the CEO's, CFO's and others eagerly await their government check so they can take the money and run into their own retirements on multi-million dollar "Golden Parachute" packages. Anyone else see something wrong with this picture?

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