Comments on: Investing Strategy Review – Retirement Accounts and Timing the Market http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/ Money Tips for a Better Life Sat, 21 Nov 2009 07:43:50 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Daniel http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/comment-page-1/#comment-116517 Daniel Tue, 28 Oct 2008 17:00:14 +0000 http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/#comment-116517 I understand on what you are trying to do in regards to life changing events, the stock market reaction, and the need for liquidity, but cutting your retirement back (i'm guessing dramatically) shouldn't be an option in the first place. Retirement funding should be a set & forget concept. In other words you set the amount you will contribute to your retirement and keep it at that. From what I took about you maxing out your retirement accounts, it sounds as if you were aggressively funding your retirement, but a little too aggressive, to where there was no real balance in the first place. Much like someone who is aggressively frugal and starving themselves from some fun things money can buy, will eventually break down and splurge on themselves. Because you were aggressively saving for retirement, you felt it was 'ok' to cut retirement dramatically. I personally believe you should set an amount to contribute to your retirement and stick with it. Don't make it too aggressive, and don't make it too little, but make it and stick with it. But meh, it's your money, do what feels right to you, money is meant to be eventually spent. Just my two cents. I understand on what you are trying to do in regards to life changing events, the stock market reaction, and the need for liquidity, but cutting your retirement back (i’m guessing dramatically) shouldn’t be an option in the first place. Retirement funding should be a set & forget concept. In other words you set the amount you will contribute to your retirement and keep it at that.

From what I took about you maxing out your retirement accounts, it sounds as if you were aggressively funding your retirement, but a little too aggressive, to where there was no real balance in the first place. Much like someone who is aggressively frugal and starving themselves from some fun things money can buy, will eventually break down and splurge on themselves. Because you were aggressively saving for retirement, you felt it was ‘ok’ to cut retirement dramatically.

I personally believe you should set an amount to contribute to your retirement and stick with it. Don’t make it too aggressive, and don’t make it too little, but make it and stick with it.

But meh, it’s your money, do what feels right to you, money is meant to be eventually spent.

Just my two cents.

]]> By: marci http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/comment-page-1/#comment-116495 marci Tue, 28 Oct 2008 14:44:20 +0000 http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/#comment-116495 I'm a firm believer in NOT having everything tied up in retirement accounts. I'm comfortable where I am with my IRA's, PERS, 401K, pension, etc. and continue to contribute. However, what if I want to retire early without the tax penalties of early withdrawals? Which I plan on. I have to be 59.5 yrs old to withdraw without penalties on some of the above. Therefore, I have a lot just in a regular diversified portfolio, rather conservative stuff, but investments nonetheless. No penalties for instant use of the $$ if I want it out. Being able to get to this money also came in handy when the little addition to the house went overbudget due to unexpected foundation problems! I’m a firm believer in NOT having everything tied up in retirement accounts. I’m comfortable where I am with my IRA’s, PERS, 401K, pension, etc. and continue to contribute.

However, what if I want to retire early without the tax penalties of early withdrawals? Which I plan on. I have to be 59.5 yrs old to withdraw without penalties on some of the above.

Therefore, I have a lot just in a regular diversified portfolio, rather conservative stuff, but investments nonetheless. No penalties for instant use of the $$ if I want it out. Being able to get to this money also came in handy when the little addition to the house went overbudget due to unexpected foundation problems!

]]> By: dYNo http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/comment-page-1/#comment-116482 dYNo Tue, 28 Oct 2008 12:50:51 +0000 http://moneysmartlife.com/investing-strategy-review-retirement-accounts-and-timing-the-market/#comment-116482 I think you did make a smart move. People (or so-called financial advisors) talking about dollar cost averaging and regular contribution to 401K just keep repeating their parrot like instruction that they memorized. With almost no liquidity in the 401k plan it makes sense for you to limit your 401K contribution just to get the match and invest it in a more liquid market such as CDs or even bonds that guarantee a fixed return. If someone who had invested in DOW since 1970 has to retire today, they would have got a meager 5-6% return on their money Vs long term bonds which would have given them a guaranteed upwards of 6-8%. The tax benefits of the 401K plan is over stated often. I feel it is a big price to pay for liquidity or the lack of. I contribute 12% to my 401K and now I am going to cut it by half and start diverting that money to Vanguard market index or target retirement funds. With the DOW heading towards 7000-, I feel it will be a great investment rather than locking my money in a 401K. I think you did make a smart move. People (or so-called financial advisors) talking about dollar cost averaging and regular contribution to 401K just keep repeating their parrot like instruction that they memorized. With almost no liquidity in the 401k plan it makes sense for you to limit your 401K contribution just to get the match and invest it in a more liquid market such as CDs or even bonds that guarantee a fixed return.

If someone who had invested in DOW since 1970 has to retire today, they would have got a meager 5-6% return on their money Vs long term bonds which would have given them a guaranteed upwards of 6-8%. The tax benefits of the 401K plan is over stated often. I feel it is a big price to pay for liquidity or the lack of.

I contribute 12% to my 401K and now I am going to cut it by half and start diverting that money to Vanguard market index or target retirement funds. With the DOW heading towards 7000-, I feel it will be a great investment rather than locking my money in a 401K.

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