You don’t have to choose, just keep saving and investing for 30 years.
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spankmonkey@lemmy.world 3 weeks agoNeeding to choose when to retire based on whether the stock market is up or down is a dogshit system.
ryathal@sh.itjust.works 3 weeks ago
spankmonkey@lemmy.world 3 weeks ago
So if the market crashes the year before I want to retire I should just put off retiring for another 30 years.
TreeGhost@lemm.ee 3 weeks ago
Like one of the other replies mentioned, when you get closer to retirement, more of the money should get shifted from stocks to more stable but lower return investments like bonds and such that are not affected by a stock market crash. Usually you can set a retirement age in the management portal of your 401k and the management company in charge of your 401k uses it as a guide to move the money into the more stable investments.
spankmonkey@lemmy.world 3 weeks ago
Only 32% of people have 401k accounts.
partial_accumen@lemmy.world 3 weeks ago
So if the market crashes the year before I want to retire I should just put off retiring for another 30 years.
Thats not how to do it. As you approach retirement age (5 to 10 years out), you move your money out of riskier (but higher return generating) stocks and into safer (but lower performing) investments like bonds or even cash (actual cash, CDs, Tbills, etc). Generally you also don’t move it ALL out of riskier stock. You don’t need 100% of your savings on day 1 of retirement, so you convert a few years worth (5 maybe?) to safe stuff and let the riskier stuff ride usually gaining more value even after you retire.
ryathal@sh.itjust.works 3 weeks ago
You should have a nest egg by then that even in a crash, a year of withdrawal isn’t significant
spankmonkey@lemmy.world 3 weeks ago
I’ll let the vast majority of Americans who can’t afford to save up a nest egg because of wealth inequality that they are doing it wrong.
Also the ones who choose to retire because of medical issues who have to spend any money not in a retirement account before insurance pays out that they did it right, but they are fucked anyway.
The system is shit even if there are ways for the well off to work around it.
thefartographer@lemm.ee 3 weeks ago
I don’t see what’s so difficult to understand. If you can’t retire at 60, try again at 90. At 120, you really should consider an alternative. If you have to wait until 150, retirement will likely be a lower-priority issue. \s
tburkhol@lemmy.world 3 weeks ago
No. If you’ve been saving for 30 years, then you’ll have 30 years of accumulated 10±20% annual gains, which should be something like 16x your start, but could be 100x if you’re lucky or 1x if you’re not. Regardless, an historic crash on retirement day may take that down to 12x your start, which is still pretty good, and will be fixed by the following couple years.
SynonymousStoat@lemmy.world 3 weeks ago
That’s generally why when you’re younger people tend to put their retirement funds into riskier investments and over time as you get closer to retirement you move portions of your money into less risky things that don’t have the potential volatility of the stock market so that by the time you retire you don’t have to worry about the stock market dipping and blowing out your retirement funds. At least that’s one way to do it; obviously this isn’t investment advice and you should seek your own professional investment advice.