How actively are regular families following their 401Ks?

With all the stock market turmoil last week and the downgrading of the U.S.’s credit rating, I am wondering how actively regular families are following or adjusting their retirement funds?

Are you a stick-it-in the account and I’ll look at it when I’m 65?

Do you examine or change your fund distribution yearly?

Are you following week to week? Do you move things to less risky holdings?

Did you pull anything last week? Do you plan to move anything around this week? Or buy low on today?

How much do you think the average family is paying attention to the stock market ups and downs?

22 comments Add your comment

Father Jane Goose

August 8th, 2011
12:10 pm

Most Americans have no clue about the stock market or their 401k. Most don’t contribute enough. Those who think they know about their 401k often fool themselves as they cannot tell you how much in overseas developing markets they have, or if they have small caps, mid caps or large caps based on value or growth for their funds. The 401k firms buy off Washington to pass laws not allowing them to advise the public so Joe Six Pack is on his own for retirement.

Most adults are silly just thinking they sock money away and at age 65 here is the big pile… fools. A few will do very well under the 401k but for most it will be a cruel wake up call when at age 58 they open their statement expecting money and realize they will have to work until they die.

Do you know how the S&P 500 did last year as a benchmark to see how well your investments did?
Do you know what the S&P 500 is? Do you know when American Idol is on?

The whole market is imploding before our eyes. Keep being ignorant of your retirement and you’ll end up with nothing.

Father Jane Goose

August 8th, 2011
12:13 pm

And the most ignorant statement I hear from educated people who know nothing about the Market’s is, “Oh I’m not worried… it will always come back”. Fools devoid of reality.

By the way, women historically are the better investors.

motherjanegoose

August 8th, 2011
12:35 pm

Scary stuff, for sure! I have not checked mine this week.

FatherJaneGoose ( we are not related) what scares me is that people my age ( 50ish) have not put a thing away for retirement and are maxed out on credit cards and home equity loans.

We just did a re-fi for 3 3/4% for ten years. I consulted with DB about it before we got started ( she knows WAY more about this than I do) . She told us we would be a dream for a mortgage agent. It pretty much sailed through with no trouble. We are not economically brilliant but I tend to be frugal and a saver. Sometimes my husband has seen the light :). We had 7 1/2 years left but could not get that length on the loan. We are saving money on the long run.

Me

August 8th, 2011
12:56 pm

Both of our 401(k)’s and IRA’s are checked multiple times. It’s not unusual for us to have an after-dinner drink while sitting on the deck doing market research. Sometimes we make changes; other times not – but we do, at least, have a grasp.

MomsRule

August 8th, 2011
1:06 pm

We examine and change regularly. But, honestly, right this minute, I haven’t a clue on the right (safest) thing to do…….it is very frustrating. And I’m worried about people.

homeschooler

August 8th, 2011
1:16 pm

My husband and I have no misconceptions about our ability to properly invest in re: to our 401Ks. He used to like to play around with e-trade and we had more ups than downs but now we are fearful of the market in general. So, we both contribute to our 401-Ks (he contributes the max each yr as he is self employed and I contribute a small amount out of each paycheck.) We set them up like we were supposed to in the beginning (certain amounts of risk based on our age, etc..) but after that, we don’t touch them. We put a lot of faith in Vanguard and the company that invests for state employees. We do have other investments (real estate, cds, money markets etc..) and our mortgage was paid off before we turned 40. Our goal is to stay debt free so that we don’t have to rely on the market. I would love to be more involved but don’t have any faith in our ability to do so. This is one area we leave up to the “experts” and hope we don’t get burned.

DB

August 8th, 2011
2:09 pm

We don’t have a 401K, since we are self-employed, but you can better believe that, at our age (mid-50’s), we are keeping a VERY close eye on market factors when it comes to our investments and savings. We don’t tend to panic, because we take a long view, but at this point, the view is getting sorter and shorter, and we are starting to gradually move funds from more aggressive growth areas to more conservative vehicles. We held off on some major investments until after the election in 2008, and I’m glad we did — it made a decided difference in where we chose to park our money, so we didn’t get hit as hard as we could have.

Father Jane Goose

August 8th, 2011
2:09 pm

The Dow is down more than 400. The S&P is down 60. The VIX surges 35% to 32 the highest since June 2010. Implied correlation surges to the highest since last summer. ES volume surges to the highest since the flash crash. Europe is opening in 12 hours. Margin debt is near record high levels, and mutual funds have record low cash. Liquidations galore. Did we miss anything?

Rose and Walsh’s college fund imploding right now…. Michael’s retirement losing thousands every day…. Theresa will have to go back to work full time (if there are any jobs left).

Techmom

August 8th, 2011
2:10 pm

I’m trying to ignore mine. At 32, I assume I’ll have to work until I die regardless of what I set aside!

Father Jane Goose

August 8th, 2011
2:54 pm

The implosion is underway…. Say goodbye to life as you know it, it’s all going to end.

And the angel blew his horn and said, “It is done”.

This whole ship is coming down…..

Mr. Ed

August 8th, 2011
4:28 pm

The whirring sound you hear in the background, that sounds like a Pacman meeting his demise is actually my 401-k deflating over the last few days.

Wrrrrrrrrrr…Wrrrrrrrr….Pop!

Don't Understand

August 8th, 2011
4:37 pm

motherjanegoose – my wife and I did exactly the same thing for exactly the same rate. Just take the savings each month and send it in anyway. This will be applied to your principle, cut your 10 years down to way less and save you EVEN MORE. There are great amortization calculators free online. Just punch in your new info, add in the additional dollars per month and see where you come out. My wife and I had a bit more than you left on our 15 but still less than the 10 we just got and with the additional payments we will be done paying about 5 months earlier than before for the same money with thousands more saved.

Don't Understand

August 8th, 2011
4:39 pm

And by the way, if the govenrment allowed GOLD to be part of a 401(K) as it can be for a private IRA, you would be doing outstandingly well right now. Meanwhile Wall Street has appreciated your monthly contributions and the banking sector has appreciated your contributions to their bottom line thanks to the Federal Reserve caused inflation that has further destroyed the value and buying power of whatever gains you might get from your 401(k). End the Fed.

RJ

August 8th, 2011
4:53 pm

My husband has a 401K and rarely checks it. It’s frustrating to me, but he says he’s gonna work until he dies anyway. I have a pension and a roth. I check my roth monthly. I have no idea what will happen. I don’t think anyone knows the answer. I won’t be making any changes right now.

Don't Panic

August 8th, 2011
4:54 pm

Remember — buy low, sell high. I’m staying the course of contributing regularly on a monthly basis, but then I have 20 years until retirement. I’m hopeful that the market will come back slowly in that many years.

n

August 8th, 2011
5:18 pm

Techmom – At 32 it will be a world of difference if you contribute…you’ll have millions instead of relying on SS. You would not need to work until you die.

catlady

August 8th, 2011
5:26 pm

No 401k, altho I do have a state pension coming (as long as they don’t figure out how to raid it). House and cars are paid off, and I live very simply. I hope to retire in the next year (60
), and then will have to make it till 62 when I will opt for SS. Then make it till 65 (ha) for Medicare.

catlady

August 8th, 2011
5:30 pm

“Blow up your TV. Throw away the paper. Move to the country. Build you a home. Plant a little garden, eat a lot of peaches. We’ll all find Jesus on our own.” John Prine

Republicanswin

August 8th, 2011
6:38 pm

It is aug and I have already maxed out my 401k pre tax contribution. I am 35 and my husband does the same…get rid of this dead weight who did not save Yet finance their lifestyle!

motherjanegoose

August 8th, 2011
9:34 pm

I looked and am still up 6% YTD, not sure what it will look like by the end of the week. My husband is up 1% YTD and that could go very quickly. We will see.

@ don’t…we will dump everything we can back into the loan after our daughter is out of college in,
hopefully, three years. Yes, I looked at the amortization chart and it just made sense for us. I asked DB first, as ( again) she knows way more about this stuff. We will have everything paid for before we are 60.

JJ

August 9th, 2011
12:27 pm

I contribute 8% right now, and my company matches 50%. Every year I don’t get a raise, I give my 401(k) a raise by upping my contribution, so the company has to up their’s too…..

Both cars are paid in full, no credit card debt, and the house note is comfortable.

Now, groceries on the other hand are killing me. The prices are unbelievable. I’m not one to drive from store to store to save a few pennies, but I am back into couponing. And we very rarely eat out in restaurants.

Van Jones

August 9th, 2011
1:34 pm

JJ @ 12:27
“…up their’s too”. Well played, Sir or Madam, well played.