nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
So we've seen the havoc wrought by forcing financial novices to save for their retirement in 401ks. The don't save enough, when they do they make uninformed investment decisions, they sell at 7000 when the stock market plummets and then decide to get back in at 12000 after waiting on the side lines for a couple of years. I'm probably being a bit too cynical, but it's more true than not.
However, things are just going to get worse as these financial novices retire. Up to now they've had a salary coming in so poor investment returns haven't been an issue and continued contributions have helped to keep the accounts from looking like complete failures. But now the true test comes.....retirement and disbursement. This is far more difficult to manage as AA, withdrawal rate, account organization for cash flow and tax planning all conspire to confuse the retiree. I can well imagine these accounts being quickly spent due to a combination of poor budgeting and expense control and bad investment decisions. Are you as pessimistic as I am.
However, things are just going to get worse as these financial novices retire. Up to now they've had a salary coming in so poor investment returns haven't been an issue and continued contributions have helped to keep the accounts from looking like complete failures. But now the true test comes.....retirement and disbursement. This is far more difficult to manage as AA, withdrawal rate, account organization for cash flow and tax planning all conspire to confuse the retiree. I can well imagine these accounts being quickly spent due to a combination of poor budgeting and expense control and bad investment decisions. Are you as pessimistic as I am.