New answers tagged

2

And since a Depression involves the whole Nation, Social Security will end, Correct? Social Security was started when FDR was president in the middle of the great depression. So you can't say it will end just because we have another depression. Are funds in 403b accounts in the event of a National Depression, such as in the 1920s, secure or are they ...


2

I would like to know if it is likely that the United States government may have to reduce Social Security payments for the remainder of this year to help fund economic stimulus packages to help bail out small businesses and big companies like Boeing. I think you'll find that of those who still earn a salary, most are: Not daring enough to invest the salary ...


2

As I understand things, Social Security Administration (SSA) has two streams of income to pay current pensioners. First is the payroll tax. The payroll tax pays off current SSA obligations (checks to pensioners). If there is anything left over, it goes into the reserves. The reserves are invested in US Treasuries (I believe SSA is the largest holder of US ...


8

That thought is a very common one... but it's deadly wrong. Your feeling of "OMG I invested and it went down, I should sell" is a very standard response new investors have to the market. And this is what makes them shoot themselves in the foot. And that's exactly what novices do: they sell after the loss: in other words, they sell low. And when they try ...


2

If you plan to retire in 2061 (your current date based on age 26 - but things may change before 2061 arrives!) you don't need to worry about a market crash now. You need to worry about a market crash in 2060. Of course there is nothing you can do to predict that now, but you have done one sensible thing. Your Blackrock target date of 2045 gives you the ...


4

I would not suggest you do anything. I know how you feel, and I know it's tempting. But there's really no benefit to making a change. You have your money in a fund designed to maximize the money you will have in 2045. What you want to do is maximize the money you will have in 2045. No change you make now will recover your $7,500 loss. Think about it this ...


2

I think there are two questions here. There's the question about investment strategy in general which I think several people have answered quite well. But then there's the question that's specifically about the 2045 Blackrock Target fund, and how it seems to not be doing too well vs. what the OP's friends are invested in. The performance of an individual ...


19

Moving money out of your 401(K), adjusting your target date, or in general taking measures to stop your losses is very likely the worst thing you could do with this account right now. You should be doing the opposite, putting more money into the account. You may have heard the phrase "buy low, sell high". The stock market is now low, so it is time to buy, ...


-4

I am 26 yo and have total $27.5k contributed to my 401(K). I have chosen 2045 Blackrock target date fund and my 2020 first quarter rate of return is -37% due to the current market blood bath. I have lost around 7.5k in the first quarter itself in 2020 and my current balance stands at ~20k. [snip] Should I take any action right now? Invest! Invest! Invest! ...


7

Yes, you should take action. You should make your regular 401(k) contribution as usual, and invest it as usual. Ensure your company's match is still in force before you do that; if your company is going through a hardship then it's possible they will suspend it, so in that case consider holding off on a contribution until you can confirm a match will be ...


65

There is not one right answer to this but in my opinion, this is not the time to move to safer options for someone in your position. You are very young and this is a retirement account, you want to continue to put money in stocks because they are going to be VERY cheap right now compared to when you plan on retiring if the market continues as it always has. ...


7

There has been zero talk about cutting social security payments to people currently receiving payments. There has been talk about cutting the taxes funding the social security system. The idea would be to make up the shortfall due to a tax cut by sending money from the general fund into the social security system. That plan has problems due to unemployed ...


18

Before you do anything I would suggest you look at history. This has happened before, and it will happen again. Also, what will happen again is that things will recover. This is an important lesson, stocks do not always increase in value. This is why savings accounts, and debt reduction can be very attractive when compared to stock market investing. ...


13

The critical question is posed in a comment by BernhardDöbler: do you need this money soon? The danger in selling is that you may be following the pattern of many casual investors: fear of missing out drives them to buy stocks when the market is very strong and then fear of losing all drives them to sell when the market is very weak. They end up "buying ...


4

There is no sure prediction of the future, but historically, the markets recover quickly (within months, at max up to three years). Taking your money out after the markets dropped is typically a way to lock in the losses, and miss the rebounds. Going into bonds means to lose again when the market go up. Nobody knows for sure, but the professional ...


-7

possibly switch to bond funds instead of stock funds


0

If you are asking such questions, then your level of readiness is zero. You are NOT ready. You do NOT understand it at all. Financial markets are suited only for very small group of people with distinctive and very narrow types of personality. Everyone who does not meet knowledge and personality criteria will fail miserably. "Invest" your money into your ...


1

It seems that all of the answers here are addressing how to invest in financial markets, and from that perspective there are several good points of advice. I am going to throw out two additional suggestions that I don't see touched on in the other answers. The first thing I would suggest someone in your position look into is investing in income producing ...


0

As observed by other posters and as observed above, there are indeed many advice :D, so I shall provide mine. Subtract the average age of your & your wife's. Subtract from 100. The result of the subtraction is the % of your asset you should put in equity (you may in crease it 5-7% if you have slightly larger appetite for risk). The remainder in fixed ...


3

Invest the entire amount into an index fund as soon as possible. You're not going to be able to time the market. You're not going to beat the market. You'll be amazingly lucky if you can even get close to average returns since you have to account for fees, even on index funds. Source: https://www.moneycrashers.com/reasons-shouldnt-time-market/ Your current ...


0

There may be specific investment vehicles in your country to reduce your tax obligations, in Australia there are Investment bonds that if held for ten years won't attract Capital Gains Tax. You can never time the market, I would commit to investing the entire sum into a Vanguard (or similar) super low management cost fund over 6 to 18 months. This way you'...


-1

World over Markets are crashing, banks too are not in a good position as fed is spending trillions to keep banks running. Advise you to invest in commercial property so that you can have your investment safe and gets monthly rent for your expenses after retirement. When the market gets back on track you can invest in stock market.


0

You say you have $700k in other retirement savings. You sound reasonably satisfied with your those investments, because you haven't mentioned changing them. The simplest and probably cheapest move would be to pool the $300k with the $700k and come back in 10 years.


8

Understand how investing works for yourself You need a freshman's understanding of investing and how the industry works. Fortunately this isn't hard at all: John Bogle's book "Common Sense on Mutual Funds" is a great place to start. You need that so you have enough intuition to recognize poppycock when you see it. We're not asking you to get an MBA. I ...


0

Financial planner is a good idea. A target retirement fund is another option to consider. It's low-cost and will manage your risk for you based on your retirement date. You also don't have to pick the one for your retirement year, if you prefer a little more/less risk.


5

I would argue that you have three possible options, two tax advantaged and one not. Backdoor Roth - Make a non-deductible contribution to a Traditional IRA and immediately convert it to a Roth. This is essentially the same as contributing to a Roth but with no income limits. You said that you currently have a pre-tax IRA, this can complicate things. You ...


1

Approaching the right Financial Advisor is the RIGHT choice. However, finding such a Financial Advisor who acts in your best interest is not that easy. Let's see what the Financial Advisor brings to the table and how to identify better advisors. Knowledge of various instruments available (Equity Index funds, Debt, Commodity etc) How much volatility you are ...


0

Alternative suggestion to a financial planner. The current situation is very volatile and the current rates of return are abysmal so it's important to minimize fees and expenses. Financial planners are expensive: they either charge around 1% of your portfolio or around $150-$300 an hour. Any type of serious engagement will wipe out a significant portion of ...


62

Lots of people will post lots of advice about what to invest in, or which research blog to read, but definitely the best advice is: Talk to a financial planner As newbie investors there are lots of basic mistakes you can make that will cost you dear. A good financial planner will avoid them, even if they don't get you the absolute best theoretical return. ...


-3

One rule is to subtract the investor's age from 100 and that's the percentage of stocks that should be held. But since a pandemic might be developing, the investor couldn't possibly be interested in stock market averages that could be hurt by broad economic declines but might be interested in individual stocks that have particular prospects. Basically, the ...


14

In my opinion that there is no better resource than bogleheads.org. This site is founded on the opinions of John Bogle, who is credited with founding the first index fund. There are tutorials, articles, and very helpful folks that help get you started. If you ask a question, they will ask for more information like your current income and assets, your ...


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