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Old 07-05-2008, 09:23 PM   #121
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I tried to see the writing on the wall even in the go-go days of the late 1980s when I was about 23 and in my first career job. I just felt like I didn't want to trust pensions or Social Security to be there for me in 40 years, so I put 12% of my income into my 401K at a time when it really hurt to do that.
That's great.. I wasn't talking about you re. the pensions. So you were skeptical, and didn't trust the government system. Right now I don't trust the financial system (banks, bond rating agencies, etc.) very much.

And you're right about people coming up having it harder; that's part of the concern.
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Old 07-05-2008, 09:23 PM   #122
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So, in your worst-case scenario you're stuck in the same boat as everyone else... Doesn't sound that bad to me.
To me that would be a horror.
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Old 07-05-2008, 09:26 PM   #123
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We don't really know do we?

Maybe I'll be living high on the hog since all the early deaths from those jumping out the windows make the insurance companies annuity accounts fat and happy. They don't have to pay off on the life insurance for suicides either do they?

Meanwhile you're chowing down on pork and beans using that worthless Google stock certificate for a napkin.
Or you might hold a worthless promise because things went down the tubes so hard Dont choke on it
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Old 07-05-2008, 09:28 PM   #124
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Or you might hold a worthless promise because things went down the tubes so hard Dont choke on it
Fun isn't it
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Old 07-05-2008, 09:29 PM   #125
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I've been reading a book by Barton Biggs. It talks about the markets in the context of events like WWII. We aren't anywhere near that scenario. The Battle of Midway was where the DJIA bottomed and it went up even when the Germans were still pushing people around in Europe. We have it easy in comparison nowadays.

I think I'll turn on my Big Screen TV (my Doomsday investment) and watch the Olympic Trials now. See yah!
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Old 07-05-2008, 09:36 PM   #126
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Fun isn't it
I believe in humanity. That the world deep in their little old hearts want to be successful
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Old 07-05-2008, 09:40 PM   #127
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And by the way, I have very little in the way of guaranteed pensions either.
Here we go again. The people who have pensions are deemed to be too blissfully ignorant to be able to analyze economic issues. "They got theirs."

I'd like to remind anyone who doesn't have a guaranteed pension that they can purchase one anytime they wish in the form of an annuity.

If this little blip in the economy is scary enough to take jabs at people who have pensions or annuities, perhaps that's an indication that asset allocations need to be reviewed in light of a revised examination of one's volatility/risk tolerance...
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Old 07-05-2008, 09:57 PM   #128
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I'd like to remind anyone who doesn't have a guaranteed pension that they can purchase one anytime they wish in the form of an annuity.

If this little blip in the economy is scary enough to take jabs at people who have pensions or annuities, perhaps that's an indication that asset allocations need to be reviewed in light of a revised examination of one's volatility/risk tolerance...
Hey, I agree. And when I suggest that an annuity might be a nice addition for a low risk tolerant person like myself, then you get hammered from all the anti-annuity types. Oh well, so it goes.
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Old 07-05-2008, 10:01 PM   #129
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Hey, I agree. And when I suggest that an annuity might be a nice addition for a low risk tolerant person like myself, then you get hammered from all the anti-annuity types. Oh well, so it goes.
ditto that...(might be a nice addition for many low risk tolerant people)
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Old 07-05-2008, 10:08 PM   #130
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Hey, I agree. And when I suggest that an annuity might be a nice addition for a low risk tolerant person like myself, then you get hammered from all the anti-annuity types. Oh well, so it goes.
Now you've got the idea!

And I think I've said before it's not a matter of asset allocation. AA is about when stocks are up and bonds are down, not when stocks are down and bonds are down. We all want energy, right? So why is the energy sector down 4% in the last couple days, to the S&P's 2%? There's just weirdness in the air.

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the investment landscape of the past few weeks has become so bizarre that it needs to be recorded for posterity.
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And I am not 'taking jabs' at all people with pensions, just those who 'take jabs' at me and mock me and others who are unsettled and concerned in a season of unprecedented challenges.
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Old 07-05-2008, 10:12 PM   #131
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Now you've got the idea!
Yep. Get hammered...
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Old 07-05-2008, 10:23 PM   #132
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Ive never seen anyone here hammer on someone about buying an annuity. Knock yourself out if you want to pay someone a fee to dish out your own money
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Old 07-05-2008, 11:45 PM   #133
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Hey, I agree. And when I suggest that an annuity might be a nice addition for a low risk tolerant person like myself, then you get hammered from all the anti-annuity types. Oh well, so it goes.
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Ive never seen anyone here hammer on someone about buying an annuity. Knock yourself out if you want to pay someone a fee to dish out your own money
Well, I thought about it a little more.

I guess one issue revolves around just how bad things are. The economy has probably met its recession criteria of two quarters by now, oil & raw materials are at all-time highs, and inflation is taking off. And the stock market is officially into bear territory. But this ain't anywhere near "bad".

If the previous paragraph is "bad", then what would we have done during the really bad ol' days? I'm not even talking about the Depression or WWII-- just 1973-4 or 1966-82 or 19 Oct 87 or even 2000-02. Unemployment and inflation haven't even reached double digits yet. VIX is barely in the teens. This economic climate is so different from the past in so many good ways that I don't think the current "bad" stuff even makes it onto the 20th century's top-ten list.

Another issue: if this little dip in the stock market has people edging toward open windows and throwing away their ER plans, then just how good were those plans? It's one thing to blithely run FIRECalc and claim to be nearly FI, but then getting despondent at a speed bump might mean that the plan wasn't so hot in the first place or that the planner doesn't have enough sleep-at-night confidence. An investor who can't handle the dips that FIRECalc creates as part of its success rate... shouldn't be invested in an asset allocation that could produce those dips. If losing 20% of a stock portfolio is a problem then that's a clear signal to avoid a high equity allocation.

If an ER plan is derailed every time the stock market is down 20%, then that ER plan is undercapitalized.

If an ER wants to retire without consuming principal, then that's not the Trinity study's 4% SWR. That's living off the dividends, which is more an SWR of 3.3% or even less.

Maybe it's worth figuring out what successful ER plans have that enables them to handle a 20% drop in the market.

Maybe it's worth remembering how we all feel about this month's market performance and re-evaluating our risk/volatility tolerance in light of our response to the headlines.

Finally, I can understand that some people want to vent. I can understand the need to analyze the differences and pick over the data to see if things really are different this time.

But I draw the line at labeling confident Young Dreamers (let alone successful ERs) as "Pollyanna"s or poking fun at their "guaranteed pensions". It's one thing to discover that a plan isn't as good as it seemed and to try to make it better, but it's quite another to take it out on posters who have actually been able to execute a plan that's holding up under its stress test. The vast majority of ERs got there through hard work, diligent saving, and taking market risks-- not winning lotteries or through dumb luck. They worked a plan that accounted for of all the craziness that went on over the last three or four decades, and many of us survived one heck of a stress test right at the beginning of their ERs. "Battle-scarred veteran", perhaps, but "Pollyanna"?!?

An argument has to stand on its own merits. Name-calling and fingerpointing tend to emphasize the fact that an argument isn't doing a very good job of standing on its own merits.

So let's lay off the personal attacks.

Maybe it's worth seeing this market as the investment opportunity it really is. It's certainly not a rational market!
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Old 07-06-2008, 12:14 AM   #134
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I am a new member here, and was very happy to find a group of FIRE's, who share my interests in financial matters (not a stock picker/day trader forum), lifestyle, and LBYM philosophy. Most of my friends and family members aren't this sophisticated about financial matters. They envy people who retire early, but have NO CLUE what it takes to generate the income they are blowing away right now. For example, a fellow worker wished he could have $500K to retire now. I almost screamed out that he was stupid for thinking that would replace his $100K+ income right now.

Then, just over the last few days, I saw some flames that were unexpected. It's OK to differ on the future outlook of the economy, but we need to remember the other person is investing his/her money, not our own. So, why get all upset if he/she is doing it his/her way? Isn't it their money to do what they wish?
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Old 07-06-2008, 12:43 AM   #135
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I don't like to bash people who have fat pensions, since doing so won't bring me one (though I think we have to rethink our ability to keep promising it to new hires, at least in the public sector), but I do agree that it's easier to be less uneasy about the future if you have one. (I highlighted "new hires" here because I want it clear that I don't support taking away pension promises from anyone already in the system.)
Contracts are renogiated all the time, one way or another.

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Old 07-06-2008, 03:09 AM   #136
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Now you've got the idea!

And I think I've said before it's not a matter of asset allocation. AA is about when stocks are up and bonds are down, not when stocks are down and bonds are down. We all want energy, right? So why is the energy sector down 4% in the last couple days, to the S&P's 2%? There's just weirdness in the air.
Bonds are up a lot in the last year. The total return for Vanguard bonds funds (except for high yield) are up between 5-15% (TIPs) over the last 12 months.
The couch potato portfolio of 50% Total Stock Market (-12.53%) and 50%
Total Bond Market (+7.23) would be down 2.65% in the last year. Not great but hardly earth shattering.

Now those of us who sold our TIPs bond a bit early and proceeded to invest most of the money in financial stocks we are hurting... But any indexer with moderate risk profile should be doing ok.
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Old 07-06-2008, 08:03 AM   #137
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Ive never seen anyone here hammer on someone about buying an annuity. Knock yourself out if you want to pay someone a fee to dish out your own money
Sounds like a good idea. Get my money back and then some. Beats the heck out of my current plan. Oh yes, assuming I live long enough. But if I don't, will I care 6 feet under?
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Old 07-06-2008, 08:31 AM   #138
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Here we go again. The people who have pensions are deemed to be too blissfully ignorant to be able to analyze economic issues. "They got theirs."

I'd like to remind anyone who doesn't have a guaranteed pension that they can purchase one anytime they wish in the form of an annuity.
Hey, I was just commenting on what someone else referred to...
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Old 07-06-2008, 08:38 AM   #139
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Ive never seen anyone here hammer on someone about buying an annuity.
Not necessarily true. Had one person "take me to task" a few years ago when I was investigating an SPIA to set up a "pension" before I retired, a few years ago, and asked for information on this board.

I've been retired (and have had the SPIA) over a year, and IMHO has been a good decision (for me, my DW, and my estate).

Oh yes, the person who argued about it a couple of years ago received the "honor" of being the only person on my "ignore list" on this forum. One thing I've learned - don't argue with "fools" - just ignore them ...

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Old 07-06-2008, 10:10 AM   #140
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I hope I have not stepped on anyone's toes here. Pensioners are OK with me -- I wish I had one too. I'm glad some posters have talked about FIRECalc and other downturns too. And yes, the June swoon took down some bond funds too (like Vanguard Total Bond Mkt, DODIX, HABDX), just a little but we were counting on them to go up when stocks went down.

If you just want to vent about the downturn it's OK, we will try to be supportive. DW sometimes gets mad at me for explaining how she should look at something rationally. I've tried to learn how to validate her anger or fears first. But if she could only see how ... never mind.
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