Destroyed retirement

The press laments destroyed retirements from the Great Recession and the pandemic.

How is it that my 401k is 68% higher than on 1-1-2010, (when all contributions stopped), my YTD return is 7.74%, and my one year return is 12.34% while only 50% of the account is invested in stock index mutual funds.

The answer is:

  • Stay the course
  • Don’t panic and lock in losses at market corrections
  • Don’t take too much risk if you are close to or in retirement
  • For most people, stick with index funds


  1. In 2002, progressives warned that we would have a retirement crisis early in the 21st Century as the Baby Boomers began to retire. “20+% will live in poverty”, “40+% will have less than 50% replacement rates”, etc. (NYU economist Edward Wolff)

    Today, official poverty of Americans 65+ is < 7% (some would say < 5% if they incorporated wealth, not just income). Sub-50% income replacement rates actually occurred to only 10% of those who retired since 1999.

    New 2020 study says, “the shift from pensions to account-type savings plans has been a disaster for lower-income, black, Hispanic, non-college-educated, and single workers.” (Economic Policy Institute) However, Fed data show that from 1989 to 2016, average retirement savings for low-income households rose by 28% above inflation; for African-American headed households, 107%; for Hispanic households, 133%; for households with only a high school diploma, 73%. Average retirement savings for unmarried Americans more than doubled from 1989 to 2016. In 1989 the average household aged 55 to 69 had just under $200,000 in total retirement savings. By 2016, average total retirement savings for 55 to 69-year olds had more than doubled to nearly $450,000.

    Note: Averages may be deceiving.

    Yes, individuals who lived at or near the poverty line all of their working lives will in fact retire to a life of poverty. Does that surprise you? It doesn't surprise me. What would you expect, what would the politicians promise you to buy votes, that people should improve their standard of living once they retire?

    About 12% of Americans consistently live in (official) poverty – down from nearly 25% in the late 50's, early 60's. That's 47 Million Americans – many of them individuals under the age of 18.

    So, no surprise that there are/were/will be tens of millions of Americans with "destroyed" retirements – where years after age 65 will be much the same as years prior to age 65.


    1. Totally agree. Everyday I see an article how Trump is bad for the market and Biden is good or how Biden will be bad or Trump is great. Also everyday I see articles for every age group on how to save or spend money for retirement before you are retired. Just like politicians, writers will write any point of view to get published and people will agree with whomever’s point of view is most like their own.

      None of the brokers make money unless they get commissions from buying and selling or holding your money in some way in the case of the “free” trade online brokers. They need that stock market churn. So they have an interest in causing fake news. I always love the reports on why the market is up or down. They make no sense and sometimes for the same reasons but different directions. The information that you hear or read on the news is “outhouse” information and that is where it belongs. In the outhouse. No passive investor can react to news of what the broker firms did hours ago. Even floor traders can’t react fast enough now. Trading is now at the speed of trading computers. Trading firms have shorten their fiber optic cable to get trades done in under 5 milliseconds, down from 40-50 milliseconds.

      I had a theory when I was younger. Never trust a stock broker or a financial planner who was willing to talk to me. If he was any good, he won’t need to find clients with only a few thousand dollars to invest. If they were so good, why are they working in a strip mall? I have proven my theory as I have begin to shop around for a financial guy to help roll over some 401Ks to IRAs and help figure out the best way to withdraw the money when needed. Turns out if you have a lot of money, the account servicing is taken over by “wealth management teams”. From what I can find out, the “team” does a lot more active management, causing churn so they make money off me. In return, I get a better return. If they do poorly, then I might walk away with my money so it is worth their trouble to treat me right.


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