blah blah finances blah blah

[rmd]

so, i've been pondering my finances lately.

as usual, i'm thinking that i should be saving more money. then again, i suspect that if i could retire this moment i'd still be thinking "man, i should be saving more money. what if..."

i'm thinking about talking to some kind of financial planning type, but haven't done anything about it yet.


[Poll #743154]

if you're local to me and have a financial planner you like, feel free to share the name. i have an irrational aversion to most "hey, talk to our financial planners" offers from amex et al since i pessimistically assume they're going to act in a way that maximizes their happiness in terms of "meeting boiler room quotas" and less to maximize my happiness in terms of "making me a lot of money".



thanks!

Comments

[llachglin.livejournal.com]

I don't know how people save enough for retirement. My 401(k) is at 10%, so matched that makes 15%. I don't see my salary going up significantly and my retirement account is at a whopping $50K. Conservative estimates are that in 20 years, assuming continued deposits and a typical return, that account might be $500K. Then add in inflation. You're talking $25K/year in late 2020s dollars. Even extending retirement to 30 years out doesn't improve matters much. Social Security would be an absolute necessity if it wasn't likely that I'll also have some inheritance.

I was looking at online financial planning advice (mainly asset allocation advice from reliable places like Fidelity.) One of the more conservative estimates of allocation recommended calculating the portion of bonds to hold in order to plan for the "catfood" future, and then worry about allocating what was left over. That calculation basically says I should put everything into bonds. I'm currently going with a more aggressive (but hardly crazy) allocation of 25% bonds, with the rest split between domestic and foreign stocks of various sizes in various mutual funds. Then I'm reallocating the mix of each category on an annual basis. I started trying this basic allocation strategy last year, and it's time to do it again this year.

As far as I can tell, that kind of conversation is where financial planners will start, and then they'll go deeper and more complex depending upon your risk tolerance and desire to know more details.

[rmd.livejournal.com]

one rough rule i've heard is that [(number of years till retirement) * 2] is the rough percentage of retirement investments that should be in higher risk investments.

[llachglin.livejournal.com]

oh, and I misspoke--my 401(k) contributions are actually 9% (6% plus the match), I think. 10% is the ESPP amount, which with recent and likely upcoming stock performance for the Company is increasingly becoming a wash. The losses over the holding period has recently been almost enough to wipe out the 15% discount, and the income tax vs. capital gains benefit requires an additional 18-month hold that is largely eaten up by losses. It's still a net gain, but not much of one, and return on other investments is probably better. I guess I could up the 401(k) contributions to the maximum, even though none of the additional contributions would be matched.

This whole subject makes me depressed, which is why I don't think about it much. Yeah, I know, bad investment strategy.