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More evidence FIRE is alien to the masses...
Old 02-19-2008, 06:06 PM   #1
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More evidence FIRE is alien to the masses...

According to this more people are tapping their 401(k) for cash, mortgaging their future in order to keep up their lifestyle.

Some of the nation's largest retirement plan administrators, such as Great-West Retirement Services and Fidelity Investments, are seeing double-digit spikes in [401(k)] hardship withdrawals and increases in loan requests, a sharp departure from levels that traditionally varied little.
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Old 02-19-2008, 06:07 PM   #2
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Good. The more they work, the more they can contribute to my stocks gaining in value, the more they contribute into Social Security and the more it will pay to be a provider of capital rather than a consumer of it.
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Old 02-19-2008, 06:20 PM   #3
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"I made the best decision I could," he said. "I keep hearing about bankrupting your future retirement. But I feel like it's far enough away that I'll be able to save up enough."


Wishful thinking.

Said Charlton: "We have to take care of ourselves now and put retirement on the back burner."

If they'd have taken care of themselves in the first place and not bought a house they couldn't afford or leased a $500/mo BMW they'd be able to put saving in the forefront.

Usually my first reaction to these stories is to feel sorry for these people, then I remember they did this to themselves. Nobody forced them to try to keep up with the Jonses. And seriously, why is 10k half of his retirement savings at age 40?? I just don't understand. Why do people want to work their entire lives??
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Old 02-19-2008, 06:33 PM   #4
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And seriously, why is 10k half of his retirement savings at age 40?? I just don't understand. Why do people want to work their entire lives??

Well, maybe, just maybe, he started a new job 8 months ago and the other huge chunk of money is in his IRA and he was just misquoted in the article.

I'm really, really guessing not, though.
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Old 02-19-2008, 06:46 PM   #5
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"I made the best decision I could," he said. "I keep hearing about bankrupting your future retirement. But I feel like it's far enough away that I'll be able to save up enough."


Wishful thinking.

Said Charlton: "We have to take care of ourselves now and put retirement on the back burner."

If they'd have taken care of themselves in the first place and not bought a house they couldn't afford or leased a $500/mo BMW they'd be able to put saving in the forefront.

Usually my first reaction to these stories is to feel sorry for these people, then I remember they did this to themselves. Nobody forced them to try to keep up with the Jonses. And seriously, why is 10k half of his retirement savings at age 40?? I just don't understand. Why do people want to work their entire lives??
unbelievable. i am astounded. what universe are these people living in?

my guess is they maxed out their credit cards, and now that cc companies are really enforcing collections and reposessing the goods, they have to pull on some reserve. i'll bet anything they already tapped out their home equity line of credit.

this and other foolish acts deserve an academy award...you NEVER touch your 401(k) for ANY reason unless it's life threatening or the street will be your next address since you lost your job a year ago.

reading stuff like this makes my eyes roll and teeth grind
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Old 02-19-2008, 08:26 PM   #6
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unbelievable. i am astounded. what universe are these people living in?
The "work until your payroll taxes save both Medicare and Social Security and then you die" universe...
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Old 02-19-2008, 09:30 PM   #7
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Good. The more they work, the more they can contribute to my stocks gaining in value, the more they contribute into Social Security and the more it will pay to be a provider of capital rather than a consumer of it.
Heck ya!
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Old 02-19-2008, 10:16 PM   #8
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unbelievable. i am astounded. what universe are these people living in?

my guess is they maxed out their credit cards, and now that cc companies are really enforcing collections and reposessing the goods, they have to pull on some reserve. i'll bet anything they already tapped out their home equity line of credit....
Why are you astounded? This IS the way most Americans live. My step kids were like this until we had "the chat" about money and debt. Now they are spending less and saving more...but...one still spends way too much trading cars every couple of years..but at least they are buying used and not brand new and eating ALL the first couple of years depreciation every time. I gave my "Pilars" and other books to one of my SILs and he is starting to "get it". We have some interesting talks now.

Still, bad habits are hard to break and spending what you don't have to get what you think you need (but don't) is very difficult for some folks. Many believe they are "entitled" to spending lavishly to make up for having a hard job. Retail Therapy. An affliction that infects both sexes and can kill a FIRE plan in short order. Heck, I could have been FI several years before I was had my DW not had this disease.
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Old 02-20-2008, 07:10 AM   #9
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He cut his retirement savings in half by taking out 10K?? He is 40?? 550 a month for a BMW? A lease no less, when that is up what ya gonna drive. Even if the lease was a two year he could have bought a scion XA for 13K and owned it after two years. I feel no sorrow for these people.
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Old 02-20-2008, 10:15 AM   #10
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"I made the best decision I could," he said. "I keep hearing about bankrupting your future retirement. But I feel like it's far enough away that I'll be able to save up enough."


Wishful thinking.

Said Charlton: "We have to take care of ourselves now and put retirement on the back burner."

If they'd have taken care of themselves in the first place and not bought a house they couldn't afford or leased a $500/mo BMW they'd be able to put saving in the forefront.

Usually my first reaction to these stories is to feel sorry for these people, then I remember they did this to themselves. Nobody forced them to try to keep up with the Jonses. And seriously, why is 10k half of his retirement savings at age 40?? I just don't understand. Why do people want to work their entire lives??
I only feel sorry for them for lying to themselves.

I think many of these folks are a little like Ostriches - deep down in the back of their mind "they do know" - they've heard all the advice - but they choose to bury their heads in the sand because they don't want to sacrifice. Same thing with a lot of these "subprime" borrowers

I always tell my kid: "whatever you do in life, you can choose to lie to me, you can choose to lie to others, but never never never lie to yourself
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Old 02-20-2008, 10:25 AM   #11
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You can't fix stupid.

With people making decisions like that, they will keep some people employed to fix their stupidity, write about it, and make a lifetime movie about it.
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Old 02-20-2008, 10:26 AM   #12
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He cut his retirement savings in half by taking out 10K?? He is 40?? 550 a month for a BMW? A lease no less, when that is up what ya gonna drive. Even if the lease was a two year he could have bought a scion XA for 13K and owned it after two years. I feel no sorrow for these people.
Fact is, most 40 year olds don't want to be seen driving a scion...........

So a 40-year old guy has only $20K in his 401K? Sounds about normal these days........
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Old 02-20-2008, 11:03 AM   #13
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This guy needs to drive around in a clown car.
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Old 02-20-2008, 11:24 AM   #14
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Its sad, really. But put yourself in their shoes: would you default on your credit card, or borrow from the 401k? Would you pull your kids out of school mid year, or borrow from the 401k?

We really, really need financial literacy education on a national basis.
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Old 02-20-2008, 11:26 AM   #15
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This guy needs to drive around in a clown car.
Hey, this is the second time clowns have been mentioned this month. It's freaking me out.
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Old 02-20-2008, 11:37 AM   #16
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Its sad, really. But put yourself in their shoes: would you default on your credit card, or borrow from the 401k? Would you pull your kids out of school mid year, or borrow from the 401k?

We really, really need financial literacy education on a national basis.
I wouldn't be in his shoes unless a freak medical condition or lawsuit put me there. Seems to me the guy squandered his wage on "things" . Where was his emergency fund? You are right we need financial literacy in this country.
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Old 02-20-2008, 11:40 AM   #17
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I wouldn't be in his shoes unless a freak medical condition or lawsuit put me there. Seems to me the guy squandered his wage on "things" . Where was his emergency fund? You are right we need financial literacy in this country.

I don't disagree that his past choices were poor. But that was then and this is now.
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Old 02-20-2008, 02:48 PM   #18
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I wouldn't be in his shoes unless a freak medical condition or lawsuit put me there. Seems to me the guy squandered his wage on "things" . Where was his emergency fund? You are right we need financial literacy in this country.
Well, obviously he doesn't have an emergency fund, right?

Fact is, we don't know his full situation, and for judging him just because YOU made better choices is a little shallow..........

That may be why millions of people play the lottery, instead of spending their money on investing for the future or paying down debt..........
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Old 02-20-2008, 03:13 PM   #19
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Several years ago a work buddy cashed out of his 401k plan to the tune of 60k. Well over have of what he had saved. Next thing I know he had purchased a used sports car and new equipment for his band. Not worries what so ever.

He will be working from now on the way he waste money. His only salvation is his wife is an only child and will probably be left a chunk of change.
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Old 02-20-2008, 03:21 PM   #20
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Well, obviously he doesn't have an emergency fund, right?

Fact is, we don't know his full situation, and for judging him just because YOU made better choices is a little shallow..........

That may be why millions of people play the lottery, instead of spending their money on investing for the future or paying down debt..........
Ok, Ill just go with what another person posted. You cant fix stupid. A thousand pardons.
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