Investment Loss Stressing Your Retirement?
Investment loss is crippling retirees and soon to retire families.
John and Mary are 58 years old.
They have been employees in their fields for over 30 years.
For most of that time, they have been saving for their retirements using 401k investments in mutual funds.
Due to government regulation of those investments, their custodians could only invest the money in mutual funds.
John and Mary believed their efforts would result in a large investment fund that would be their source of cash for living expenses in their golden years.
Their investment adviser made calculations of how much money they would have to have invested to be able to have enough money to live on.
John would sometimes confess to Mary that he worried about getting sick and using up their money early.
With $500,000 in the bank earning 10% interest, they would have $50,000 per year to live on.
Interest rates, though, have fallen more than they ever would have thought.
At 5%, they would need at least two times that sum, or $1,000,000.
John and Mary have grown a fund of $650,000 by taking advantage of compound interest and saving diligently.
Investing that money at 4%, they would have $26,000 per year to spend on living expenses.
The $26,000 would be just a little over $2,000 for monthly spending.
Their financial world has suddenly melted away.
Their baby boomer savings have fallen at least 40%, just like so many of their friends.
The $400,000 left will give them only $16,000 to live on each year.
They now confront a future of living on less than what the government calls poverty income! Without 30 years or even 15 years to save for retirement like they were taught, they must find other ways of getting cash flow to pay for their retirement.
They simply don't have enough time left to save to build a retirement fund.
They could retire within months, as could someone in their 20s, by looking at tried and tested methods.
But our educational system teaches getting jobs, rather than those tried and tested methods.
Who else wants to know how to get a monthly check that is not dependent on working at a job so they could retire or spend time with their family?
John and Mary are 58 years old.
They have been employees in their fields for over 30 years.
For most of that time, they have been saving for their retirements using 401k investments in mutual funds.
Due to government regulation of those investments, their custodians could only invest the money in mutual funds.
John and Mary believed their efforts would result in a large investment fund that would be their source of cash for living expenses in their golden years.
Their investment adviser made calculations of how much money they would have to have invested to be able to have enough money to live on.
John would sometimes confess to Mary that he worried about getting sick and using up their money early.
With $500,000 in the bank earning 10% interest, they would have $50,000 per year to live on.
Interest rates, though, have fallen more than they ever would have thought.
At 5%, they would need at least two times that sum, or $1,000,000.
John and Mary have grown a fund of $650,000 by taking advantage of compound interest and saving diligently.
Investing that money at 4%, they would have $26,000 per year to spend on living expenses.
The $26,000 would be just a little over $2,000 for monthly spending.
Their financial world has suddenly melted away.
Their baby boomer savings have fallen at least 40%, just like so many of their friends.
The $400,000 left will give them only $16,000 to live on each year.
They now confront a future of living on less than what the government calls poverty income! Without 30 years or even 15 years to save for retirement like they were taught, they must find other ways of getting cash flow to pay for their retirement.
They simply don't have enough time left to save to build a retirement fund.
They could retire within months, as could someone in their 20s, by looking at tried and tested methods.
But our educational system teaches getting jobs, rather than those tried and tested methods.
Who else wants to know how to get a monthly check that is not dependent on working at a job so they could retire or spend time with their family?
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