Some of us are directly impacted by the downturn in the economy. Most of us who own 401k / 403b / IRA plans have seen a dramatic drop in value. Some people who were planning on retiring in the next few years won't be able to, since they can't rely upon
their stock investments or any value in their home (as it likely has dropped).
My question is, what do you tell someone who is very close to retirement (or maybe not..) that says, "I don't have to worry about the stock market. I am a state employee with a great pension"... ?
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Bass
I need better writers.
Maybe they don't. The stock market and economy effects everyone, but it effects some people more then others. Someone with a insured government pension is probably not as effected as someone with a 401k/IRA.
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dahat
inanity makes my head hurt
Anyone who was planning on retiring anytime soon and was massively affected by this little dip is either a GD idiot or have a financial planner who is the same if not worse.
As you get closer to retirement more and more of one's investments should be moved away from more volatile things like stocks and mutual funds and more stable things like bonds and other insured investments (ie CD's and savings accounts).
This is not something you start to think about a year or two before you plan on retiring but ideally closer to 5-10 years out.
To answer your question though... if a person is expecting on collecting a government pension and is quite close to doing so... in theory they have little to worry about (pension wise at least)... provided the government or company funding it has sufficient assets and/or tax base so as to fund it... otherwise that pension may end up in the hands of the feds and the Pension Benefit Guaranty Corporation (if this is a US based employee) which has the same implied backing as Freddie and Fanny Mae... the US taxpayer. -
Some deregulators are still in denialdahat said:Anyone who was planning on retiring anytime soon and was massively affected by this little dip is either a GD idiot or have a financial planner who is the same if not worse.
As you get closer to retirement more and more of one's investments should be moved away from more volatile things like stocks and mutual funds and more stable things like bonds and other insured investments (ie CD's and savings accounts).
This is not something you start to think about a year or two before you plan on retiring but ideally closer to 5-10 years out.
To answer your question though... if a person is expecting on collecting a government pension and is quite close to doing so... in theory they have little to worry about (pension wise at least)... provided the government or company funding it has sufficient assets and/or tax base so as to fund it... otherwise that pension may end up in the hands of the feds and the Pension Benefit Guaranty Corporation (if this is a US based employee) which has the same implied backing as Freddie and Fanny Mae... the US taxpayer. -
Minh
WOOH! WOOH!
dahat wrote:dahat said:Anyone who was planning on retiring anytime soon and was massively affected by this little dip is either a GD idiot or have a financial planner who is the same if not worse.
As you get closer to retirement more and more of one's investments should be moved away from more volatile things like stocks and mutual funds and more stable things like bonds and other insured investments (ie CD's and savings accounts).
This is not something you start to think about a year or two before you plan on retiring but ideally closer to 5-10 years out.
To answer your question though... if a person is expecting on collecting a government pension and is quite close to doing so... in theory they have little to worry about (pension wise at least)... provided the government or company funding it has sufficient assets and/or tax base so as to fund it... otherwise that pension may end up in the hands of the feds and the Pension Benefit Guaranty Corporation (if this is a US based employee) which has the same implied backing as Freddie and Fanny Mae... the US taxpayer.
Anyone who was planning on retiring anytime soon and was massively affected by this little dip is either a GD idiot or have a financial planner who is the same if not worse.
It's refreshing to see that getting hired by Microsoft hasn't changed you from an * who takes delight in the financial disaster faced by many old people. You *!
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dahat
inanity makes my head hurt
Here let me fix that for you...Minh said:
dahat wrote:dahat said:*snip*
Anyone who was planning on retiring anytime soon and was massively affected by this little dip is either a GD idiot or have a financial planner who is the same if not worse.
It's refreshing to see that getting hired by Microsoft hasn't changed you from an * who takes delight in the financial disaster faced by many old people. You *!
It's refreshing to see that getting hired by Microsoft hasn't changed you from an * who doesn't feel sympathy or responsibility to/for those suffering in the financial disaster faced by many old people who did not take proper steps to protect themselves in some way. You *!
You're right... it's so horrible for me to expect that people be responsible for themselves. I'm such an *. -
Maddus Mattus
Do, or do not. There is no try. - Yoda
No mere mortal can understand the products they are selling. Only after you bought their product, do you come to understand the trap you are cought in. So how can one act responsible?dahat said:
Here let me fix that for you...Minh said:*snip*
It's refreshing to see that getting hired by Microsoft hasn't changed you from an * who doesn't feel sympathy or responsibility to/for those suffering in the financial disaster faced by many old people who did not take proper steps to protect themselves in some way. You *!
You're right... it's so horrible for me to expect that people be responsible for themselves. I'm such an *. -
dahat
inanity makes my head hurt
Maddus Mattus said:
No mere mortal can understand the products they are selling. Only after you bought their product, do you come to understand the trap you are cought in. So how can one act responsible?dahat said:*snip*Care to provide an example beyond those vague generalities so that a proper response can be made?
Or are you claiming that there were waves and waves of unscrupulous property/investment sellers who were outright preventing the buyers from knowing what they were signing and the implications there of? If so... getting a lawyer to read over a contract and give an opinion really isn't that hard or expensive, especially when you are talking about a large investment or purchase. -
evildictaitor
strcpy(malloc(4), "Oh noes!");
I think he's talking about deriviative bonds and compund stocks, which were triple-A rated and bought by lots of pension funds and other "play-it-safe" investors, which bombed out because they actually were worth much less than triple-A. To some extent he has a point - these bonds are difficult to understand and they were "duped" into buying triple-A rated stocks that arn't worth the paper they're printed on, but on the other hand, very few pensioners will be buying deriviatives or compound stocks directly.dahat said:Maddus Mattus said:*snip*Care to provide an example beyond those vague generalities so that a proper response can be made?
Or are you claiming that there were waves and waves of unscrupulous property/investment sellers who were outright preventing the buyers from knowing what they were signing and the implications there of? If so... getting a lawyer to read over a contract and give an opinion really isn't that hard or expensive, especially when you are talking about a large investment or purchase. -
No, the people that created these things don't understand them. He is correct.evildictaitor said:
I think he's talking about deriviative bonds and compund stocks, which were triple-A rated and bought by lots of pension funds and other "play-it-safe" investors, which bombed out because they actually were worth much less than triple-A. To some extent he has a point - these bonds are difficult to understand and they were "duped" into buying triple-A rated stocks that arn't worth the paper they're printed on, but on the other hand, very few pensioners will be buying deriviatives or compound stocks directly.dahat said:*snip*
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jamie
mazie is amused
evilvaghater?evilvaghater said:
No, the people that created these things don't understand them. He is correct.evildictaitor said:*snip*
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dahat
inanity makes my head hurt
I can buy that as a possible argument... though my original statement still stands. Diversification is key, even when it comes to seemingly safe investments.evildictaitor said:
I think he's talking about deriviative bonds and compund stocks, which were triple-A rated and bought by lots of pension funds and other "play-it-safe" investors, which bombed out because they actually were worth much less than triple-A. To some extent he has a point - these bonds are difficult to understand and they were "duped" into buying triple-A rated stocks that arn't worth the paper they're printed on, but on the other hand, very few pensioners will be buying deriviatives or compound stocks directly.dahat said:*snip*
Unless you are willing to fully trust what other people tell you, one should always be just a bit skeptical and willing/able to examine the facts for themselves. If that isn’t possible in all cases then reducing ones vulnerability in an area they cannot verify themselves is advisable. -
evildictaitor
strcpy(malloc(4), "Oh noes!");
That's certainly true, but arguably one of the points of the grading system was to make understanding the levels of risks in various investments easier to understand. If the government's own regulatory system is telling you that this bond is triple-A rated and will almost never default, it seems unreasonable if it then transpires that the bonds were deliberately made up of partly toxic assets and that you can't get your money out from them. It seems to me that this is more of a failure of the grading system than of the investors not understanding the bonds. If anything it sounds like the grading agencies and regulators didn't understand what they were rating, which is a whole lot more scary.dahat said:
I can buy that as a possible argument... though my original statement still stands. Diversification is key, even when it comes to seemingly safe investments.evildictaitor said:*snip*
Unless you are willing to fully trust what other people tell you, one should always be just a bit skeptical and willing/able to examine the facts for themselves. If that isn’t possible in all cases then reducing ones vulnerability in an area they cannot verify themselves is advisable. -
it's true, I hate evil vagjamie said:
evilvaghater?evilvaghater said:*snip*
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More sellers are growing desperate as homebuying stalls locallydahat said:
I can buy that as a possible argument... though my original statement still stands. Diversification is key, even when it comes to seemingly safe investments.evildictaitor said:*snip*
Unless you are willing to fully trust what other people tell you, one should always be just a bit skeptical and willing/able to examine the facts for themselves. If that isn’t possible in all cases then reducing ones vulnerability in an area they cannot verify themselves is advisable. -
evildictaitor
strcpy(malloc(4), "Oh noes!");
Like commuist broccoli, holocaust denying sprouts and cabbages that drown kittens?evilvaghater said:
it's true, I hate evil vagjamie said:*snip*
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I wonder if we won't hit some sort of point where the market stagnates, but prices don't significantly drop (on average). That would happen when people are trying to sell their homes, but literally can't afford to sell below $ XYZ.eagle said:
More sellers are growing desperate as homebuying stalls locallydahat said:*snip*
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dahat
inanity makes my head hurt
There’s a radio host I used to listen to who had a line that was something to the effect of “Never believe anything I say unless it is consistent with what you already know or believe or have spent the time to research the topic yourself.”evildictaitor said:
That's certainly true, but arguably one of the points of the grading system was to make understanding the levels of risks in various investments easier to understand. If the government's own regulatory system is telling you that this bond is triple-A rated and will almost never default, it seems unreasonable if it then transpires that the bonds were deliberately made up of partly toxic assets and that you can't get your money out from them. It seems to me that this is more of a failure of the grading system than of the investors not understanding the bonds. If anything it sounds like the grading agencies and regulators didn't understand what they were rating, which is a whole lot more scary.dahat said:*snip*
It’s not only good advice when listening to someone talk politics/law/motorcycles on the radio but in general.
if it then transpires that the bonds were deliberately made up of partly toxic assets
If fraud was involved then that is a separate issue.
It seems to me that this is more of a failure of the grading system than of the investors not understanding the bonds.
That assumes that said grading system should be relied upon so heavily by investors.
When you... buy a car, computer or even a pair of shoes. Do you go off of ratings and reviews? Or your own examinations and research?
If anything it sounds like the grading agencies and regulators didn't understand what they were rating, which is a whole lot more scary.
And through people unquestioningly trusting said ratings and regulators they make the ratings and regulators seem that more credible, causing an even greater issue.
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