Need retirement savings advice

I woke up today, and found that I was 42.

I have a problem. I saved for quite awhile, but I found that the whole compounding interest thing was a lie that Fidelity told me.

It works great if you actually make 10% on your investment. However, I realized after saving for however many years, the investments that Fidelity told me to invest in didn't make anywhere near 10% returns. In fact, most of them lost money over time.

At that point, I said screw it. I'm not saving my hard earned money to lose it, so I stopped my 401k altogether. I didn't see the point in losing my hard earned money.

So now I'm 42, and I only have 100k saved for retirement. I'm supposed to have 600k saved for retirement by the time I'm 50. That's 8 years away. There's really no conceivable way I can make 1/2 a million with my current job. I probably take home 80k after the gov't steals half my money for "taxes", which they don't need, because they own a printing press.

But, in any case, I'm thinking I should start saving for retirement again. I just need to make sure that I'm at least making 10% on my investment per year. I have no clue what to invest in that would yield 10%.

I can google how to save for retirement until my fingertips go numb, but I find that most of the information available on the subject is bogus, and does not pan out in the real world. I need some real world advice from people who have had success in saving for retirement. I've lost all trust in institutions like Fidelity. They wasted 10 years of my life by losing hard earned money, and gave me a tremendous set-back. Not sure how to make up the time and savings at this point in the game.

 

heh

 

I do have to disagree on the compounding interest part. I started my 401k in 1990 and did not start making max contributions and matching contributions until 2000 I would have to pull the file out in the office to see exactly how much the corp and myself have contributed but it is a fraction of what it is worth today. Yep it tanked in market down turns but has always recovered and always grown over the long run. IF it were the only investment that I have, I could retire very comfortably on it alone. The Difference in value of it at 10 years old and at 33 years old is EPIC. 401ks were designed to be a very long term retirement savings vehicle. Thus the heavy tax and penalty burden for cashing them out early and not rolling them over or transferring them when you move to a different employer. It always amazes how many people borrow against their 401k or Cash it out prematurely losing all of the ground they had gained and killing the greater future ground they would have gained. The more it gains in value the faster and greater the growth becomes. Where you start seeing the big surge in 401k growth is around the 20 year mark assuming you were fully funding it and had a employer that matched.

As far as what to invest in that will give consistent 10% + growth annually...... Ag Land if you can afford to buy into it these days and will hold it at least 10 years. 200 acres of Southern IL Ag Land I bought for $1300 per acre in 2009 and sold last year for $7650 per acre did a little better than 10% I do not foresee Ag land ever going down in value going forward. Ag Land = Food and a lot of Billionaires are competing to buy up all of the ag land that hits the market or auction block now days. If you control the land and fresh water you control the world. Thus the very wealthy are driving the Ag Land prices up much faster than ever before. Certain Individual Stocks particularly in the stable tech corporations and Pharma yield a lot better than 10% but you put that in a safe or safety deposit box and forget you have it until the time comes to retire. Personally I do Ag Land, Municipal Bonds with select towns and Counties, and a my 401k that is 33 years old now and my Employer (My Privately held Corp) Matches Dollar for Dollar for the Corp Tax Write off. The 2000 shares of AT&T stock I Bought way back is a lot more shares now and worth a whole lot more than what I have in to it. The 5000 shares of Sears stock I bought way back on the other hand............ The first rule of investing is that NOTHING is guaranteed and EVERYTHING has a risk of tanking.

 

I remember the day the stock market topped 10,000 for the first time. It's over 34,000 last I checked. The worst year I had in the market was followed by the best. It's up and down, but generally trends up. Remembering that will keep you from panicking when there's a dip.

If you have $100,000 in savings and it's just sitting there it's going to be worth less every day.
Day after day. Worth less.. worth less...worthless.

Since that money is actually losing value it's got to be moved to something more secure, or into an investment. I remember $400 an ounce gold, and while gold and silver will probably be better protection from inflation, they're not likely to do more than maintain their value against inflation.

Best option with limited time may be to live off the money in the bank and contribute far greater than 10% to your 401k.

How much you contribute and what kind of risk is up to you, but if your employer is matching any of it you're already winning. It can be a tax savings as well.

Good luck.

 

How much were you paying to Fidelity to invest your money for you? You, yourself could simply invest your money yourself and save a bundle or look for firms that invest in sector stocks funds with low fees. You screwed up when you stopped contributing to your 401k, now that time and money are GONE! You are NOT going to make up that $500,000, in the next 8 years, so don't even try! Also, who told you that you had to or were going to make 10% return on investments? That would be nice, but there is no guarantee that you are going to make anything! Investing is just another form of gambling! There are winners and there are losers, unlike kid's t-ball where everybody gets a trophy! Start contributing again, contribute the max (not just what your employer will match), that might mean that you need to put your life on hold for the next 10 years or so (NO travel, entertaining, new toys, girlfriend, premium cable, eating out (beans, rice, oatmeal, etc.) and fun! Do that and you might be able to retire in about 30 years!

 

On the other hand, you could start contributing to your 401k, work until you are 70 (to maximize your social security check), reduce your retirement expectations (no traveling for you), and use the proceeds from your 401k to supplement your life (aka pay bills)!

 

There's also unknown potential to inherit some money. At your age it may not be near, and it may not be in play at all.

My parents buried everybody in the generation before them. Liquidated all the properties, invested all the accounts and lived comfortably until they died. I repeated the pattern, but on a far smaller scale. My kids will have to deal with even fewer as the family gets smaller and smaller.

Elder survivors in large families who inherit all the assets of everyone in the family can find themselves surprised to wake up one day and realize they're multi-millionaires. I knew a guy who did just that. Bought himself the biggest blackest Mercedes they had on the lot and bought white Lexus for each of his girlfriends. Family he hardly knew from New Jersey had left him a fortune.

Your mileage may vary.

 

If a person is behind and feels the need to catch up, it may lead a person to make poor decisions and make things worse

A person, you can look in the eye, may be a better source of advice.

YMMV

 

Maximize your 401k match in a 2050 account.
maximize your tax deductoins in an Vanguard IRA 2050 account. Never touch them untill retirement

 

Compounding interest does indeed work, it has for me. Even a 7% return will about double your money every 10 years.

The simple answer is pump as much as you can into high growth stock index funds in Roth style 401ks and Roth IRAs. The CEO of Vanguard admits that Index funds outperform 90% of all managed funds and their fees are much lower. Park it, let it grow and in 25-30 years you can start using it tax free.
So, if you can make an extra $1400, then after about 30% taxes its about $1000. Invested in Roth style investments at even just 7% that becomes $2000 in 10 years, $4000 in 20 and $8000 in 30 and that is all tax free. Will inflation cut into that? Sure but doing nothing and lamenting over how Fidelity failed you doesn’t fix your problem at all. Nor will government bail you out. Feel blessed you realized this at 42 and not 52 like lots of people as you can see from the example above, that extra 10 years is huge!

 

Just keep buying guns.

 

and ammo/components.

 

If you're only 42, you may want to get back get back to saving and in a big way. Don't worry about the ups and downs at that age. If the value of your portfolio falls, you still have 25 years or so to recover.

I've had money with Fidelity since the mid-90s and they did pretty well overall up until those 81 million idiots voted Trump out, or someone cheated, take your pick.

Then it began losing money because they still had me invested heavily in stocks, a No-No for someone close to 70 since if the value falls, I don't have 25 years to make my money back. I talked to them several times about it. They kept telling me I was invested conservatively but still had over 50% of my portfolio in stocks, and of course, still kept losing money, 20% at one point. When you factor in Joe's inflation, some 16% dollar devaluation since Jan 2021, the losses look even worse. I brought that up to them too. I think their money managers are Democrat shills.

Finally I went to a local independent financial manager. He agreed with me that I shouldn't be in stocks at this age and with interest rates where they are, I could be doing much better with different investments. So I had him take over the management of the accounts. They're still with Fidelity, but he manages the investments, they don't, and he's a Fiduciary.

He also seems to think that whoever wins the election next year, doesn't matter who, the losing side is going to be very upset which could create some civil unrest and by extension turbulence in stocks. They guy seems to have his ear to the tracks.

Time will tell, as I just got the accounts out from under Fidelity's management. I meet with him again on Tuesday.

 

Why are you still with Fidelity? Aren't you now paying two people to manage your money?

 

Also fidelity has put out some woke climate hugging advertising lately.
So if their funds are in the toilet they have likey adding woke companies to their funds.

 

I have been buying solar panels and lithium batteries.
The dollar will continue to fall and the means for making power will only rise.

 

Check out this video. Banksters are stealing 150k in fees from 401ks over the course of a lifetime. Crazy

The Retirement Gamble | FRONTLINE

 

There's a very good investment forum that I found called Bogleheads Investing Advice and Info. People are very helpful there.

John Bogle started the forum and he wrote this book which people are advising that I read:
The Little Book of Common Sense Investing - Wikipedia

Bought it on Amazon. Haven't received it yet.

John C. Bogle - Wikipedia

 

Advice is usually free and worth exactly what you paid for it, but investment advice is usually going to cost you something...and that includes John C. Bogle. You could have just got a copy of 'Investing for Idiots' and saved a lot of money. If you have a computer and some money, you can do all of this yourself at a very low cost. There are classes offered at local colleges and universities that will teach you about investing, usually through a continuing education program and taught by professors. Stop looking for someone to tell you how to invest your money and learn how to do it yourself!

 

Might be legit, or it could be a cult! Time will tell! WRONG!!! MY BAD!

I did some research and even though John C. Bogle died almost 25 years ago his advice is sound! He was the founder and CEO of the Vanguard Group and was credited with popularizing index funds back in the 1970s.
The ideal investment vehicle, according to Bogle was a low-cost index fund representing the entire US market, held over a lifetime with dividends reinvested.
Bogle preached patient long-term investment with low brokerage fees!
Exactly the opposite of your investment strategy! Do you think that you can do this?