Time to bump up that 401k

[ManInBrown]

Been retired 7 years and still havent touched 401. It's grown nicely in that time.
Not going to until required at age 72.

Yeah but the bulk of your retirement funds in a 401k build up in the last few years as you’re adding. You’re not contributing anymore and the market is tanking. How is it growing?

 

[Over70irregs]

Yeah but the bulk of your retirement funds in a 401k build up in the last few years as you’re adding. You’re not contributing anymore. How is it growing?

Especially with negative/low current returns in an inflationary environment.

 

[ManInBrown]

Especially with negative/low current returns in an inflationary environment.

Well obviously not in the current environment, but I’m not retiring right now.

 

[Brownslave688]

The average inflation/recession cycle lasts 10 months, your raise is forever.

Uhhh inflation doesn’t go away. Ever heard of compounding interest?

 

[rod]

You invest for the long term. If you want a short term investment go to Vegas.

 

[Brownslave688]

I get that. But many people do not get a cost of living raise.
So tighten your belt up a little bit more and spend your money wisely and be thankful for God you didn't buy Bitcoin last year

Just saying telling people to up their 401k because they got a raise when they’ve actually taking a big pay cut in the past year is a bit off.

 

[IVE GOTTA PACKAGE 4U]

Just saying telling people to up their 401k because they got a raise when they’ve actually taking a big pay cut in the past year is a bit off.

Well if you make it now what's an extra one or two percent of your paycheck?
Most of us have not lived through a rising interest rate cycle.
We are at the end of cheap money and I think things may be different for the next couple of decades

 

[Over70irregs]

Well obviously not in the current environment, but I’m not retiring right now.

Let’s rename it lateral job transitioning

 

[olroadbeech]

Yeah but the bulk of your retirement funds in a 401k build up in the last few years as you’re adding. You’re not contributing anymore and the market is tanking. How is it growing?

7 YEARS!!!!!!

ya it's down about 20 % this year but what has it grown in last 7 years????? The dow in 2015 was around 17,500. It doubled since then until this last downturn. Even with the current downturn ( which wont last forever ) it's up almost 80%.

mine has gone up $400k in last 7 years even with this 20 % downturn. I can not contribute to 401k or my IRA's anymore but still have a non retirement brokerage acct. with Vanguard which I contribute to every month.

We have almost as much in IRA's as the 401k . The Vanguard Index funds have done much better than Prudential instruments.

 

[Over70irregs]

Not sure if this means anything as far as our current state.

 

[Up In Smoke]

Uhhh inflation doesn’t go away. Ever heard of compounding interest?

Inflation has run well under your raises for nearly 10 years. If you were unable to manage your finances in that free money cycle, I can see where this current cycle has you worried. Wages are up, causing the supply of everything from raw materials to energy to be up. Tighten your belts, give up some of your wants and let the economy sort out the rest. Compound interest is something you receive from an investment, not sure how you tried to relate it to my response. When your money's money makes money, it's a good thing.

 

[Brownslave688]

Inflation has run well under your raises for nearly 10 years. If you were unable to manage your finances in that free money cycle, I can see where this current cycle has you worried. Wages are up, causing the supply of everything from raw materials to energy to be up. Tighten your belts, give up some of your wants and let the economy sort out the rest. Compound interest is something you receive from an investment, not sure how you tried to relate it to my response. When your money's money makes money, it's a good thing.

Raises were not over inflation for the past decade. Real inflation has been higher than they’ve claimed for decades. Just like right now it’s not 8-9% it’s more like 20%. Wages have virtually nothing to do with the current inflation. Compound interest isn’t just on investments. It’s simply compounding. Inflation interest is compounding also.

 

[BSWALKS]

Raises were not over inflation for the past decade. Real inflation has been higher than they’ve claimed for decades. Just like right now it’s not 8-9% it’s more like 20%. Wages have virtually nothing to do with the current inflation. Compound interest isn’t just on investments. It’s simply compounding. Inflation interest is compounding also.

I think the government stat I heard is about $103/week.

Honestly I think it's double that.

 

[Up In Smoke]

Raises were not over inflation for the past decade. Real inflation has been higher than they’ve claimed for decades. Just like right now it’s not 8-9% it’s more like 20%. Wages have virtually nothing to do with the current inflation. Compound interest isn’t just on investments. It’s simply compounding. Inflation interest is compounding also.

If your borrowing at compound interest your in big trouble. Outside the mob, I'm not sure what business could sell their money at compound interest. The term is usury. The inflation rates from 2010 to 2021 averaged 1.73% increase yoy. I believe our wages covered that and them some. Wages are the most costly part of virtually every American business. In service sector businesses wages and benefits make up nearly 60% of total cost of revenue. When wages go up, the cost of all materials and internal services go up. From April 2020 to April 2022, the average wage increase was north of 22%. This is known as Capitalism. Charge as much as you can for as long as you can and the consumer will tell you when it's to much. Currently the consumer is spending at near record levels month over month (CSI), so I don't see inflation waning until the consumer says uncle. Whether you accept the government/stock market numbers on inflation or not, I think you need some evidence to support your argument. IMO

 

[olroadbeech]

Inflation has run well under your raises for nearly 10 years. If you were unable to manage your finances in that free money cycle, I can see where this current cycle has you worried. Wages are up, causing the supply of everything from raw materials to energy to be up. Tighten your belts, give up some of your wants and let the economy sort out the rest. Compound interest is something you receive from an investment, not sure how you tried to relate it to my response. When your money's money makes money, it's a good thing.

Compound Interest has been call the 8th wonder of the world......and for good reason.

 

[Brownslave688]

If your borrowing at compound interest your in big trouble. Outside the mob, I'm not sure what business could sell their money at compound interest. The term is usury. The inflation rates from 2010 to 2021 averaged 1.73% increase yoy. I believe our wages covered that and them some. Wages are the most costly part of virtually every American business. In service sector businesses wages and benefits make up nearly 60% of total cost of revenue. When wages go up, the cost of all materials and internal services go up. From April 2020 to April 2022, the average wage increase was north of 22%. This is known as Capitalism. Charge as much as you can for as long as you can and the consumer will tell you when it's to much. Currently the consumer is spending at near record levels month over month (CSI), so I don't see inflation waning until the consumer says uncle. Whether you accept the government/stock market numbers on inflation or not, I think you need some evidence to support your argument. IMO

We aren’t talking borrowing money. We are talking about inflation. Inflation is compounding. It’s why if inflation stayed at 10% wed need a $4 an hour raise this year and like a $6 an hour raise by the end of the contract just to keep up.

Everyone knows real inflation has been higher than government calculated inflation for 4” years or so

 

[Over70irregs]

Inflation. The hamster wheel that keeps on giving. Weekly checks, COLA will not help you store your energy.

 

[Up In Smoke]

We aren’t talking borrowing money. We are talking about inflation. Inflation is compounding. It’s why if inflation stayed at 10% wed need a $4 an hour raise this year and like a $6 an hour raise by the end of the contract just to keep up.

Everyone knows real inflation has been higher than government calculated inflation for 4” years or so

I'm not sure why you think inflation is so much higher than reported. Every time someone or some business makes a purchase, it's recorded by the seller as revenue. Revenues are listed on a company's balance sheet by law and reflected on their P&L statements. Taxes are paid on the profitability of each business. PPI is factored into a company's P&Ls and the cost of their goods and services reflect that. The increase in wages, capital, raw materials and energy have driven company's PPI to inflationary levels. If we get 10% raises, that only increases all our customers PPI and the chain is never broken. What the Fed is doing has worked in the past to curb the consumer's demand for goods and services. Most inflation/recession cycles last less than a year. If the economy is as strong as they say, we'll start coming out in late 22 or mid 23. Free market capitalism, let it do it's job.

 

[Over70irregs]

Don’t know any drivers making 250k. Boiling .

58% of Americans are living paycheck to paycheck after inflation spike — including 30% of those earning $250,000 or more

- With inflation still near 40-year highs, more than half of all Americans are living paycheck to paycheck, according to one report. - Consumers who are struggling to afford their day-to-day lifestyle tend to rely more on credit cards and carry higher monthly balances making them financially...

news.google.com

 

[Brownslave688]

I'm not sure why you think inflation is so much higher than reported. Every time someone or some business makes a purchase, it's recorded by the seller as revenue. Revenues are listed on a company's balance sheet by law and reflected on their P&L statements. Taxes are paid on the profitability of each business. PPI is factored into a company's P&Ls and the cost of their goods and services reflect that. The increase in wages, capital, raw materials and energy have driven company's PPI to inflationary levels. If we get 10% raises, that only increases all our customers PPI and the chain is never broken. What the Fed is doing has worked in the past to curb the consumer's demand for goods and services. Most inflation/recession cycles last less than a year. If the economy is as strong as they say, we'll start coming out in late 22 or mid 23. Free market capitalism, let it do it's job.

Because 40+ years ago they changed the way it’s reported to “smooth it out” it just makes it look not as bad as it is.

I mean I thought that was pretty common knowledge.