Retirement goal changed due to inflation?

[SAJ-99]

It was not my intent to be political and infer that the Dems were hell bent on taking my money. The point that was poorly conveyed is that the reading material I referenced actually stated that they would take it however, I believe it was to be understood that with inflation and devaluing of the dollar, the purchasing power of money saved would decrease. The decrease in purchasing power would in effect make your 401k "disappear" (read this as not literally disappear, just not have the same impact to your financial situation in the future that you might have planned).

As for "Job". I know drama. 20 year military guy here. Trust me when I say I know drama and government thought process. New job with unknown drama is retirement.

HT is as good as anywhere to pose questions like this. I don't know any of you personally so your answers are void of bias that may impact the truthfulness of a response.

I understand. It is "stimulus" when one party does it, but it is "reckless and inflationary" when the other party does it. The parties are interchangeable. Best to avoid either biased view when planning for the future, because it is unknown for all. Look at the other retirement thread. it had a lot of good info. Anytime someone asks me when/if they can retire I ask them when do they plan on meeting their maker. Without that definite end date, it is all a guess.
Your 401k should be in diversified equities and fixed income. It should hold up well to most inflationary scenarios.

 

[Nick87]

reckless and inflationary"

Regardless which party hands it out. Reckless and inflationary seems to be the case.

 

[BackofBeyond]

I understand. It is "stimulus" when one party does it, but it is "reckless and inflationary" when the other party does it. The parties are interchangeable. Best to avoid either biased view when planning for the future, because it is unknown for all. Look at the other retirement thread. it had a lot of good info. Anytime someone asks me when/if they can retire I ask them when do they plan on meeting their maker. Without that definite end date, it is all a guess.
Your 401k should be in diversified equities and fixed income. It should hold up well to most inflationary scenarios.

Yup.

Both sides are learning (well, IMHO, one side learned a while ago, the other is catching up quickly) the currency of outrage. It's so much easier to appeal to emotion as opposed to appealing to logic.

Inflation has been ridiculously low for quite a while, when compared to a long term trend line. So if inflation spikes in the next couple years, it's a course correction back to that long term trend not directly related to one type of crook vs. the other type of crook - i.e. R vs D.

 

[AlaskaHunter]

My 401k is diversified and I made more in the 401k last year than I would in my last 3 years of working.

The cost of housing, gas, construction materials, food, plane tickets, ammo, guns, all have risen substantially this past year,
so inflation is real from that perspective. Has anything not increased in price this past year?

 

[BigHornRam]

Building bigger is not part of the plan. Better finishes, yes, but not bigger. It has more to do with the Rock Springs vs. Star Valley market.

My first job when I retire in about 3 years will be to build a new house. It will be small but nice. Hopefully the building material shortages will sort itself out by then. Sold my Missoula county property recently and reinvesting in some Wyoming acreage. Left over cash may get "invested" in a pack string. Spend the next 10 years looking over every nook and cranny in the Absarokas, Beartooths, and Wind Rivers. The Washington goofballs can KMA!

 

[Nick87]

Has

Employees it seems like, if I had a dollar for every help wanted sign I pass on my commute, well I'd have lots of dollars.

 

[SAJ-99]

Has anything not increased in price this past year?

Toilet paper?
Its a base-effect problem. We are comparing prices today (a reopening economy) to the beginning of a global pandemic when the world was about as "shut down" as it could be and still function. No matter how many economist phd's you get in a room, any estimate on inflation levels is a wild guess. Hence the question- how much is temporary and how much is going to be sticking around. This whole thing is an economic experiment and no one knows the answer, but many will tell you they do, especially if they have a solution to sell you.

 

[BuzzH]

Building bigger is not part of the plan. Better finishes, yes, but not bigger. It has more to do with the Rock Springs vs. Star Valley market.

You need to build a trophy room with a house attached...

 

[nrpate05]

Interested in what news outlet is reporting that the Dems are going to take away your 401(k).

 

[BenInMT]

My 401k is up nearly 50% in the last 365 days. Thanks Obama!

 

[Beanland_fan]

I remember reading somewhere that the Dems would take away your 401K if they were to win the presidency. Given the current cries of inflation and the devaluing of the dollar due to "printing money", how does that impact retirement goals? The cash that sits in the 401K now keeps losing value as the dollar value declines so basically the Dems aren't taking it away, they are basically making it worthless.

Really getting sick of the shiznizzle that is going on here at work (family owned business and I am not family) and would like to walk away from the drama. Would walk away today making pretty good money a year just going to the mailbox (other sources of income). Don't live high on the hog and am debt free.

Suck it up and take a wait and see approach to see if the inflation is just a blip on the radar or walk? What would HT do?

I wouldn’t suck it up, I’d find another job and then resign. There are many good paying options out there for hard working people.

If you retire, aside from the financial impact, what is your option for health insurance? A good company paid health insurance policy is worth a lot.

 

[406dn]

I wouldn’t suck it up, I’d find another job and then resign. There are many good paying options out there for hard working people.

If you retire, aside from the financial impact, what is your option for health insurance? A good company paid health insurance policy is worth a lot.

That's easier said than done when you are close to retirement. A good company, offering a good job, wants a person who will grow with their company.

That is someone with the prospect of working fifteen to twenty five years, not two or three years.

 

[Vinootz]

Republicans as well as Democrats are in the business of taking the money of citizens. They are one and the same.

 

[SD_Prairie_Goat]

I won't talk R vs D or how that may affect your 401k. Here are my key take ways from your post:

• Sounds like your 401k has a fair amount of cash component to it. Over the long haul, say 10 years plus, that will always lose value because of inflation. One of the best ways we can combat that is to invest in the market according to your risk tolerance. Most folks prefer to roll more bond heavy portfolio closer to and into retirement due to lower risk levels. The slight research I have done into portfolio mixes in retirement (I'm a long way from needing it) suggests that a heavier than standard stock/bond mix offers better outcomes in the long term vs the heavy bond option. Think standard as 60/40 bonds to stocks and the recommended as 60/40 stocks to bonds.
• To me the only risk I see politically with regards to 401k value is if they changed the amount you are taxed on withdrawing funds. Don't think anything is in the short term pipeline to do that, so I wouldn't worry too much about something you can't control. Other option is to start rolling into a Roth to pay taxes on the monies now if you suspect your taxation will change in the future on your 401k value.
• I know very little about your situation in general, but when approaching retirement and wondering when to actually retire, healthcare needs to be a major consideration. Without employer provided healthcare, you can be looking at premium costs in the 10's of thousands until you are able to get on medicare. Sometimes putting up with the crap is worthwhile until you can avoid private healthcare premiums. Another common method to avoid this issue is to partially retire to a company with benefits to part time workers and a better work environment. Think oddball jobs, I met many car dealership courtesy drivers who worked 30 hours a week to get healthcare and didn't have a worry in the world as they were just driving folks around instead of stressing.

As with everything in life, there is no one perfect solution. Retirement is no different, each case is different and all we can provide is our thoughts and knowledge based on the little information provided to us.

 

[Vinootz]

I worked on Wall Street for 10 years and believe me both R n D structure the laws to separate you from your money. lol.

 

[SAJ-99]

I worked on Wall Street for 10 years and believe me both R n D structure the laws to separate you from your money. lol.

As does Wall Street. It is America's real favorite pastime.

 

[Gr8bawana]

Interested in what news outlet is reporting that the Dems are going to take away your 401(k).

Ooo ooo I have a guess!

 

[AlaskaHunter]

I won't talk R vs D or how that may affect your 401k. Here are my key take ways from your post:

• Sounds like your 401k has a fair amount of cash component to it. Over the long haul, say 10 years plus, that will always lose value because of inflation. One of the best ways we can combat that is to invest in the market according to your risk tolerance. Most folks prefer to roll more bond heavy portfolio closer to and into retirement due to lower risk levels. The slight research I have done into portfolio mixes in retirement (I'm a long way from needing it) suggests that a heavier than standard stock/bond mix offers better outcomes in the long term vs the heavy bond option. Think standard as 60/40 bonds to stocks and the recommended as 60/40 stocks to bonds.
• To me the only risk I see politically with regards to 401k value is if they changed the amount you are taxed on withdrawing funds. Don't think anything is in the short term pipeline to do that, so I wouldn't worry too much about something you can't control. Other option is to start rolling into a Roth to pay taxes on the monies now if you suspect your taxation will change in the future on your 401k value.
• I know very little about your situation in general, but when approaching retirement and wondering when to actually retire, healthcare needs to be a major consideration. Without employer provided healthcare, you can be looking at premium costs in the 10's of thousands until you are able to get on medicare. Sometimes putting up with the crap is worthwhile until you can avoid private healthcare premiums. Another common method to avoid this issue is to partially retire to a company with benefits to part time workers and a better work environment. Think oddball jobs, I met many car dealership courtesy drivers who worked 30 hours a week to get healthcare and didn't have a worry in the world as they were just driving folks around instead of stressing.

As with everything in life, there is no one perfect solution. Retirement is no different, each case is different and all we can provide is our thoughts and knowledge based on the little information provided to us.

I retired at 62, took out enough cash to cover us until 65 and limit our income so we qualify for Obamacare.
Under Obamacare our BlueCross Gold policy is less than $200 a month, and it would be over $2000 a month if not subsidized.
That is how we dealt with heath care costs.

 

[SD_Prairie_Goat]

I retired at 62, took out enough cash to cover us until 65 and limit our income so we qualify for Obamacare.
Under Obamacare our BlueCross Gold policy is less than $200 a month, and it would be over $2000 a month if not subsidized.
That is how we dealt with heath care costs.

Sounds like you took a pretty wise approach to covering those three years.

Cheers to you man. $24k a year just in premiums really eats away at your retirement. Makes working a couple extra years more acceptable

 

[hank4elk]

Hey now, most of us are thousandaires!

Elitists..........if you did not figure inflation into your methods/formulas/plans,you did not plan.
If your concerned about inflation in this market,your way off what inflation is. Try the 70's....
Just ask Hank,he knows nothing & has nothing to prove it. Except I own my place & am debt free & poor.

PS,don't expect your insurance to be the same when you retire as promised. Or believe the promises.
Keep your health while you have it. If not become a millionaire and just pay for nothing.....