I was over 32 when the 401k stuff was in swing - H had it in his company and we contributed 15% and company matched 6%. I started work in a company in 1992 and in my senior mgmt position put into place the 401k.
When people are juggling lots of demands - finishing school, young kids, student debt, living in expensive areas, etc it is not easy.
We delayed having kids,and that was very helpful for us. Now we are 4 years from retirement and funds are in place.
I did look at what we lost (and later recovered) during the 2008/2009 period. We do understand investments more, better ways to diversify and deal with risk. H is super happy I have been guiding our family financial ship pretty well. DDs understand money and appreciate planning for the future.
When one does get to retirement, they can always do things to stretch their money. If one is very healthy (and pays attention to staying healthy over the years) they will spend less on health care and less time with medical interventions.
I was too young to have any real exposure to the market back in 1987 but was working in an investment job then and remember it well. Folks in my office were concerned about keeping their own jobs and we did have a hiring/salary freeze for awhile.
Survived the other crashes just fine. I’m a “buy and hold” gal for the most part. Also, a bit of a contrarian investor so like to dip in on downdrafts if I have free cash on hand. As I am aging, the trick for me will be determining a proper investment balance (less aggressive than I have been historically) as I won’t have the benefit of time to wait things out as much as I have in the past.
I remember crash in '87. We didn’t do anything different. Just kept on keeping on. Same with '08. Buy and hold.
The first 401k plans rolled out about the time we had our first baby and mortgage. I can remember reading Newsweek and asking DH who could possibly be able to not get their full salary every month and put it aside for “like 30 years”. Fortunately we read more and decided that we couldn’t pass it up. Those years of fairly modest deferral have sure added up.
I remember the crash of '87 as I was just over a year in my first real job. H was working for IBM and one of his friends there was getting ready to cash out stock for a down payment on a house when the crash happened. That one didn’t effect us much since we were just starting out in our careers.
We started saving with a Keogh Plan (pre-401K) and, like @doschicos, have always done the buy-and-hold and considered the three crashes we’ve weathered to be buy opportunities. My dad was a banker all his life and gave me and my brother sound, if conservative, financial advice from the time we opened our first passbook savings accounts as kids. I am unencumbered by financial knowledge other than the time value of money and the miracle of compound interest, but I suspect those two concepts are at the heart of any successful financial strategy.
Okay, I love that line, “I am unencumbered by financial knowledge”. I think I need to keep that one in my hip pocket for so many possible times to use…
Not necessarily true. A very high percentage of ones funds (I heard 90%) are spent in the last 2 years of life. Those last years may be later in life if you had a healthy lifestyle, but it will still be spent. Then there are the number of illnesses that are the result of a combination of bad luck and genetics.
My SisILs didn’t spend much in the last two years of their lives, nor did my MIL nor FIL. My folks are still alive, so no idea what they will spend in the last few years of their lives.
Yes, bad luck and genetics, that seems to be an overriding factor. You can spend your entire life as a health nut and those things will smack you in the face as fast as anyone else. We also have our insurance company spending a lot of money on us to do proactive things. Any little issue, we follow it up with tests and specialists, spending thousands of dollars when most wouldn’t even get these things checked out. I have a feeling we are going to be very expensive people, even if we do everything we can to stay healthy. Which means, stick with the best insurance plan possible.
Yes, we have the best insurance plan and H has Medicare A & B. He has been spending a lot of time with physical therapists lately and loves having less pain–shoulder, knee and back. I have chronic health issues from no known origin.
We spent a lot of money (ours and insurers) on seeing a lot of specialists and testing when I was having a lot of infections. It’s all relative because everything we spent was less than one ER visit or hospitalization would have costed.
We also spend a lot of our own funds flying to MD appointments to see our medical specialists. We always try to do some other visits – medical conferences, sightseeing and/or spending time with family when we are traveling to see MDs.
I am the product of ‘bad genes’ - dad died at 63 of cancer, and mom died at 77 of dementia. I already survived my cancer challenge - stage III very aggressive cancer, and have been cancer free now 7 years. I also swim 3 miles a week (1 mile at a time, breast stroke), and just had my lipid profile - and I am doing pretty well. Medical oncologist was very impressed on my swimming.
H has had rising cholesterol so is now on Provastin 40 mg in addition to 100 mg Losarten (for BP). H has a lot of longevity in his family - more on one side than the other (I am talking great aunts living in a range from 103 - 107, and his grandpa living to 96). H’s parents are both 88 now and one has siblings that have lived to 96; another has a 90 YO sibling that is in pretty darn good health.
The vaccines that are now covered for over 60, for shingles/chicken pox, and for pneumonia - we are getting (H has already gotten both). If you know anyone that has had a bad outbreak would be vaccinated - very painful.
There are points on staying healthy for better quality of life. When you feel good and are doing positive things to stay healthy, along with a positive mind frame, life is good.
I am talking about ‘younger’ retirement years, versus the upper range of life when one typically doesn’t travel much due to physical limitations and safety issues. Sometimes being smart on acceptable limitations.
Also for individual/family considerations. It helps to have people that understand the medical and insurance gyrations - and the need for a ‘medical advocate’ when you are too sick to be effective in thinking/voicing needs. I fulfill the role as RN/BSN, as does DD1, RN/BSN - and we are both active working in nursing. BIL is a pharmacist and a pretty good resource too.
We have our LTC insurance as our financial safety net for medical care to let us stay at home or very nice care places when we ‘fail’ on the ADLs. Hope to never need. But agree that last two years of life can be expensive.
And really smart people can have bad stuff happen because they don’t think about vulnerabilities - two MD friends had bicycle accidents - one (and older cancer survivor) should have had a bike with upright handles (he ended up in ICU from his fall/injuries); the other took a spill which could have been avoided but she tried to veer from a pedestrian that could have shifted - or she just should have stopped, and badly shattered her wrist from her fall. Both have pain and debilitation from these falls - one more than the other.
For the first two crashes I didn’t notice much (DH does most of our 401K tracking) We were getting 50% match on the first 6% of earnings saved to 401k. Our philosophy was to leverage that matching and save for long term without much fretting about short term ups/downs.
In 2008 we admittedly got d!@#$ lucky. DH just told this story to friends a lunch today (we all talk a lot about retirement planning, the high cost of health care, etc etc)… He had most funds temporarily in bonds at the time since undecided about the best path going forward.
colorado-mom
that WAS lucky!
My luck happened in Dec of 2008, when I walking through deserted stores at Stanford Shopping center.
The ONLY store that had ANY customers [and they were PACKED in like sardines], was the recentky opened Apple store.
I realized that that was the ONLY store where people were spending $$ for Xmas - EVERYONE in there was buying iPhones.
Bought a bunch of Apple in march 2009.
My lucky story: when D got accepted into her college, we sold all stocks in her account because the investment horizon became 6 month or shorter. She was HS class of 2008…
BIL jumped out of stock market and in a cash holding position before the '08/'09 financial meltdown. So that was his financial bit of lucky move.
I have a few other type of financial lucky stories.
Bet small amounts at KY Derby in 1988 (the only one I attended) - studied the race forms because we arrived early. Won the daily double (#1 in race 1 and 2) and in race 2 also won an exacta (picked which pair would come in 1 and 2). Had won close to $400 with placing $24 in bets. I didn’t win on other bets - sometimes didn’t get in line in time to get a bet down, but I didn’t bet away any of my won money.
We split the grand prize two years in a row on a school fundraising ‘draw down’. $4K won each time, for $8K total.
To us, financially fortunate is that H has kept working continuously, and kept his job (and benefits) when lots were slashed around him with his employer.
I also feel financially lucky to have been able to jump back into the job market after 18 years SAHM and also after surviving aggressive cancer; have a very good career interview this week (because I am now ‘currently working’ in the industry) which will put me back on the career level I got off of.
I temporarily lost a lot in the last two declines, but I stayed the course, as Bogleheads like to say, so I did fine. Many I know took money out, and lost on the big upswing. I have bo e less aggressive/more risk averse as I get closer to retirement, so I’m not making nearly as much as people with a high stock allocation.
Our big mistake, for lack of a better word, was not contributing more to 529s, so we didn’t get the big upswing. My Husband insisted on saving in cash instead, but it would have been much better if we’d kept putting money in 529s after 2008. But we are two down and have plenty saved for last year of third, so all is good.
We have a regularly scheduled appointment with our financial planner tomorrow. H and I have still not transferred one of our large age related retirement accounts from Fidelity to her so she can manage it. H wants to have have everything centralized but I don’t like having all of my (nest) eggs in one basket. I know she will be pushing us to close the account and give it to her to manage. Wish I knew why I am so hesitant as she has been very good for our financial status.
@NorthMinnesota I totally understand. DH and I use two advisors and manage our own TD Ameritrade accounts. It just feels too risky to hand over our entire retirement fund to one company. The one with most of our retirement account has had a lot of turnover in the past few years so I’m especially glad to be diversified.
