Of course both accounts have done well; the market doubled under Obama, and has gone up by 13 percent since Trump has been elected. How much better than the average has the managed account done? Over time, will the gain, if there is one, justify the amount you will give up factoring in the compounding interest you would recieve on your original investment if you never "donated" .8 percent. Most people who have managed accounts can't answer such questions. Can you? If you can, let's see some numbers in black-and-white.
Early Retirement Payout
- Thread starter NonyaBiznes
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Of course both accounts have done well; the market doubled under Obama, and has gone up by 13 percent since Trump has been elected. How much better than the average has the managed account done? Over time, will the gain, if there is one, justify the amount you will give up factoring in the compounding interest you would recieve on your original investment if you never "donated" .8 percent. Most people who have managed accounts can't answer such questions. Can you? If you can, let's see some numbers in black-and-white.
Serf
Well-Known Member
I was thinking social security in an Eastern European country, seriously.
Serf
Well-Known Member
Easier said than done. That's all I can afford to contribute.
McFeely
Huge Member
While I'm certainly not loaded working for FedEx (currently on step 2 of the pay scale), I have bumped my 401k contribution up by 1-2% each year just to keep it growing. I'm in my 40s and not getting any younger, so I need to stay on top of it or I'll be working until I'm 80 if my body can even hold up that long. There are times when my budget has been lean, sure, but if I budget accordingly I've found I've actually been doing pretty damn good with regards to retirement.
I guess my point is that I'm in the same boat as most of you guys financially speaking. I don't make a ton of money, I live in a pretty expensive part of the country, but setting aside my 401k contributions has been a priority of mine so that I don't have to work forever.
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Oldfart
Well-Known Member
There is no way to get an EXACT comparison unless you had the same money invested in an un-managed as you did a managed account. I pay about $250 a quarter and have been very satisfied with my returns. Considering I have used the same strategy from my managed account in my un-managed account, my cost was spread out over 2 different accounts. It is much easier to decide what funds to invest in when you are in a employer based 401k. You are limited to 15 or 20 possible funds. When you invest in an IRA, your possibilities are in the 1000's. Instead of picking my own funds and paying for each transaction, I decided to use a managed account and let people that know way more than me help me manage my money. When I make more money, they make more money. I figured that was a pretty good incentive for them to steer me in the right direction.
It will be fine
Well-Known Member
Just buy index funds. No one out performs them in the long run and you'll save all your fees.
Oldfart
Well-Known Member
Index funds are a part of my portfolios. I just decided to seek advice for something as important as my money. I call a plumber when I have pluming issues. A roofer when I have roof issues. I called a money man when I wanted advice on how to invest my money on the open market. No transaction fees on trades and I felt the .8% I paid on 1 account was worth the $1000 I spent last year. Considering I used the same strategy on another account, I basically cut my fees in half. I am a truck driver, not a professional money manager. Like Dirty Harry said "Every man must know his limitations"
If it works for you then it works for you, but consider this: approximately three percent of fund managers are capable of consistently getting gains above-and-beyond the average market yield. Professionals of that caliber generally don't cater to John Q. For all I know, you're a one percenter, and you have the luxury of having access to elite financial advisors; but if not, you may want to reconsider if your advisers are truly worth the fees they are paid. I know it doesn't sound like much, but a very low percentage can make a difference of hundreds of thousands of dollars in the long run.
Oldfart
Well-Known Member
My managed account is about 1/10 of my entire portfolio. My mirrored account with the same firm represents another 1/10. 1/2 is invested in my FDX 401k, which also offers a fee based managed option that I do not use. The rest is scattered between the old FDX RSP, OSP and other self managed accounts. I am not a 1 percenter but I feel like everyone could benefit from listening to a money man. I weighed the option of paying for every transaction in that fund or paying for a managers opinion and decided to use a small % of my portfolio and let a pro make the choices. I feel like it was money well spent.
Try Georgia. Pro-American, signs, menus, etc in English, very low cost, super safe, Tbilisi beautiful city, Caucasus mountains highest mountains in Europe. And they'll give you a 360 day tourist visa free so no red tape. Best deal going.
Serf
Well-Known Member
That sounds amazing.
Yep that is a way of taking advice from industry experts as well.
UpstateNYUPSer(Ret)
Well-Known Member
The payout was prompted by a change in the pension rules.
But no one forced them to offer a buyout. It's to their advantage to do so.
Oldfart
Well-Known Member
Lump sum is usually to the advantage of the payer. Look at any lottery jackpot. Lump sum is a good bit smaller than payments. There is no right answer which is better. Only what works for you. Just like what age do you begin receiving Social Security. You have to do what best fits your needs. More money in waiting till you are 67 but taking it at 62 works best for others.
Oldfart
Well-Known Member
How do you know something hasn't changed for them to offer this option. Some obscure rule or legislation might have been the reason this offer was made. Just like the first buyout 15 years or so ago. The pension fund was so over funded due to the small group of retired employees, it was strongly suggested they offer buy outs and get the pension fund more in line with proper levels.
Now those are the excellent points that are needed and appreciated. In the case of a man if there is a history of men who don't live long just making it to 62 can be challenging.
If they were forced to offer the buyout that would be financial news in the Wall Street Journal. As I said before it's to their advantage to offer a buyout because they can lower overall pension costs. The buyout 15 years ago was buying out manager contracts. Did not affect their pensions.
Oldfart
Well-Known Member
Not sure what you mean but the pension plan was overfunded and people over 50 were offered the buyout and were given up to 10 years of age so they could retire like a 60 year old plus some funds to help with insurance payments. Not only managers were offered this buyout. It did affect their pensions because a 52 year old could retire as a 60 year old. Their pension was bigger.
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