The way my 401k is looking I’ll never retire. I need a fixed return..?
Saturday, December 10th, 2011 at
4:29 pm
Question by Ayanna J: The way my 401k is looking I’ll never retire. I need a fixed return..?
Best answer:
Answer by IAAW
It is happening to everybody.
Know better? Leave your own answer in the comments!
Tagged with: 401k • Fixed • I'll • Looking • need • never • retire. • return
Filed under: Business / Investing
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The depends upon your age.
To ensure a reasonably comfortable retirement: you need to save at least 7% of your gross income for retirement (only) if start saving in your 20′s; 10% if you start in your mid 30′s; 15% if you start in your mid 40′s. If not, you will need to work in retirement, at least some of the time.
As you cross the 60 year old line (and/or get within 5 years of retirement, whichever is earlier), you need to do some serious calculating as to how much you are actually spending every year and for what. You should multiply that number by 5 (for the first 5 years) and be sure that at least that amount of your retirement funds is in cash plus an equal or greater amount (for the second 5 years) is in maturing government securities (preferably TIPS) that can be rolled into short term securities at maturity.
If you do this, you have guaranteed yourself 10 years to recover from any market downturn to disaster.
You are limited to the options offered by your plan. There is probably a conservative bond fund or money-market fund offered.
Come on, when will you people learn? Stocks always go back up. If you get out now you will miss some big gains.
You need aggressive investments to retire, not fixed.
Fixed won’t keep up with inflation.