Comments on: Discussing Retirement with Parents: Is a Comfortable Retirement No Longer an Option?

By: Younger Investors Become More Risk Averse than Older Investors | Steadfast Finances

Thu, 14 Jan 2010 17:19:38 +0000

[...] back. I’ve spoken to several older investors who went from talking about early retirement to might not being able to retire at all. So not surprisingly, they want to increase their risk in order to boost their account balances [...]

By: Matt

Matt — Mon, 16 Mar 2009 20:19:23 +0000

@ Pinyo

Yeah I’m sure lots of young adults are in that spot right now. I’m fortunate my parents have a state backed pension plan plus social security in their future. Let’s hope that is enough.

By: Pinyo

Pinyo — Mon, 16 Mar 2009 13:05:41 +0000

My parents, both 65, are in very similar situation and they will be working for a while longer. They both start saving very very late and don’t have anywhere near 8 times their pre-retirement income.

Most likely, I’ll be helping them through their retirement.

By: Weekend Reads and March Madness is Almost Here! :: Steadfast Finances

Weekend Reads and March Madness is Almost Here! :: Steadfast Finances — Mon, 09 Mar 2009 03:17:03 +0000

[...] Free Money Finance has been hosting a March Madness personal finance tournament of his own where I successfully made it passed round two with my article about telling a family friend they don’t have enough money for retirement. [...]

By: The Stock Market Bubble No One Talks About :: Steadfast Finances

The Stock Market Bubble No One Talks About :: Steadfast Finances — Fri, 16 Jan 2009 04:54:23 +0000

[...] wrong, ask yourself how many people you knew whose retirement accounts lost half their value or the 1 in 6 homeowners that are underwater on their mortgage because they bought a home at the peak of the housing [...]

By: Mark Berger

Mark Berger — Sat, 20 Dec 2008 03:29:16 +0000

Matt,
I’m Mberger47 at WSS if you want to be buddies: http://www.wallstreetsurvivor.com/Public/Members/Profile/mberger47.aspx

Which ETF do you like to play? I also use a leveraged ETF to go short the commercial Real estate industry.

By: Matt

Matt — Sat, 20 Dec 2008 03:02:34 +0000

@ Mark,

Excellent suggestion, and thanks for commenting.

I’ve got an account at Wall Street Survivor just to play along w/ the 250k contest. I’m using the 3x leveraged ETFs but just haven’t gotten the timing down perfectly yet.

By: Mark Berger

Mark Berger — Sat, 20 Dec 2008 02:50:47 +0000

When you recommend for folks to “Educate yourself” I suggest a web site that allows you to practice stock market investing – risk free.

It’s called Wall Street Survivor (www.wallstreetsurvivor.com) and you get to trade real stocks in real time using fake money.

It’s a great tool for learning how to manage your own retirement money rather than counting on some crook to do it for you.

By: Matt

Matt — Fri, 19 Dec 2008 18:55:04 +0000

@ Ben

You’re correct, it is a bad time to change asset allocation since any move into fixed income would limit his potential to participate in a rebound. In this case, it was really difficult for me to suggest a possible “swing for the fences” scenario by remaining in equities (via mutual funds), but that is what we decided.

Normally, a person of his age should be diversifying into defensive stocks or fixed income as a means of capital protection. Since he didn’t do this, I would argue that remaining in equities after a 50% loss is justifiable.

Thanks for your question.

By: ben

ben — Fri, 19 Dec 2008 18:27:02 +0000

Matt,
I am interested in your advice to him about changing his asset allocation. I aggree that all stocks is bad for someone his age, but (re)balancing when the market is so down seems like a bad time to do it?

By: Matt

Matt — Tue, 16 Dec 2008 03:23:09 +0000

@ TStrump

Agreed, I think he should do challenge his financial advisor more. He’s paying for the services after all, might as well get his money’s worth.

I’m also seeing older people have what I call a “it [stock market] will come back” type of mentality. As their investments lose value, their tolerance and patience can be a negative thing in the end.

By: TStrump

TStrump — Tue, 16 Dec 2008 03:11:08 +0000

A friend of mine is in in 60’s and going through the same thing.
Unfortunately, he may have to postpone retirement for a couple of years.
I think most people have a ’sit and wait’ mentality, which really isn’t investing.
Hopefully, my friend will become for proactive and start to challenge his financial planner more.

By: Sunday Money Roundup - On The Train Again. | My Two Dollars

Sunday Money Roundup - On The Train Again. | My Two Dollars — Sun, 14 Dec 2008 14:02:26 +0000

[...] Steadfast Finances has some great advice on talking to your parents about retirement options. [...]

By: Matt

Matt — Fri, 12 Dec 2008 16:02:18 +0000

@ Mr. TML,

I knew that fantasy land comment would get a comment from you, and you’re right, from our conversations and reading your blog, you are a complete 180 from the person in this example.

It’s not my intent to wrongly classify anyone, but unfortunately, I’m seeing more cases/news reports like this due to poor planning and wishful thinking to those individuals in the 50+ age bracket who are – just now – seeing how their retirement funds stack up.

After hearing my viewpoints, he wasn’t exactly surprised, but there was some obvious deflation in his voice. I could tell he was dejected when I concluded that even a rebound in the market would not help him meet his retirement goals.

His future actions will hopefully follow my suggestions of boosting his tax deferred retirement savings to the max, in both his 401k and by opening a new Roth IRA. I also advised that he educate himself about the market since his investing IQ was far lower than it should be, as well as trying to identify means of generating secondary income since he is a fit and able bodied person (e.g. finding a paying coaching position).

From my estimation, his portfolio was not allocated appropriately to his age, and when the market tanked, he was hit hard. Asset allocation will kill ya if you’re not keeping your eye on the ball.

By: Mr. ToughMoneyLove

Mr. ToughMoneyLove — Fri, 12 Dec 2008 12:16:34 +0000

Not all of us in boomer land are also in fantasy land, nor are we counting on the government (although I better get some SS since I’ve paid in for so long!) As a generation, we have failed to educate ourselves properly in matters of personal finance and that is our fault. (I hope I am an exception!)

How did your long time friend react to the hard truth you brought down on him about his financial future? What is he going to do differently?