15 January 2008
I regard myself as largely a defensive person, so you might think that my 401(k) investments tend toward the conservative, and indeed they do; I don't realize huge returns except in the most bullish of markets, but I seldom lose much for very long.
To keep a bustle in my hedge funds requires a little bit of work and an enormous amount of patience. Over the years I have stashed retirement cash in six different accounts, all of which are currently active and three of which are currently receiving new deposits and none of which lost money last year, even my bond/mortgage fund. (The worst performer in the portfolio was a large-cap blend under Goldman Sachs management, which squeaked out a gain of 0.62 percent for the year despite fourth-quarter stock-market woes.)
The fund manager, hoping to whip up some anxiety, advises that I will require X dollars per month in retirement, despite the fact that I'm earning only about 0.75X while actually working. Either they're expecting some serious inflation, or they're making some dubious assumptions, and I lean toward the latter, since the figure is based on retirement at 65 and people born in 1953 can't draw full Social Security until age 66. Further, they expect my salary to go up three percent a year between now and the Distant Future, which isn't likely: my pay is limited by, among other factors, my unfortunate choice of ancestors.
In point of fact, I can't imagine retiring at all; more likely, I'll drop dead some night at the office and the proceeds will be rolled into my estate, and then rolled right back out again to pay the bills.Posted at 7:17 PM to Common Cents