With the stock market acting like a bead of grease on a hot griddle, lots of folks have been talking about how the incoming 401k reports are going to affect the election. I don’t have a 401k; since I’m a public employee, my pension is managed by OPERS. I haven’t gotten that statement yet, but the statement for my deferred compensation plan, an additional, voluntary, pre-tax retirement option came in the mail today.
A nice thing about this plan is that I can go in daily and make changes to how my money is invested. I’ve done this a few times over the last year as the grease griddle-hopped in the stock market. Since I started the plan, I’ve done nothing but lose money. Even as I moved the investments into more and more conservative portfolios, I’ve lost more and more. The last statement indicates that 55% of the money that was taken out of my paycheck this last quarter and invested in my deferred compensation plan has been lost. I’ve lost 17% of the total money invested since July of 2007.
So I log on to stop additional deferrals and find out that in the last week, I’ve lost an additional 11% in the value, bringing the total loss in one year to 28%.
That’s some serious shit. Especially since my investments are diversified among the most conservative investment portfolios that they offer. No more additional deferrals until what’s currently in there starts earning money. I basically gave that cash to someone else to throw away. I’d much rather throw it away myself, or just let it pile up in my savings account, which, at least, is FDIC insured.
I wonder how much worse my OPERS pension plan is going to be.
INVEST IN YOUR OWN ANNUITY THAT IS GUARANTEED. INDEX ANNUITY WITH NO LOSS GUARANTEES. DAD
I “lost” 30% this year and “made” 24% the year before. I look at it this way: I may not be making money on the money I’m putting in there, but I’m buying ending up with more shares than I was getting a year ago (I’m getting something like 30% more shares with the same amount of money). So when this whole stock thing gets up to where it was I should get my 30% back and then some. It’s not where you are at any given time, it matters where it is at when you finish. So retiring now would be a bad move (but then I think we knew that already) Here is to having a excellent stock prices 35 years from now.…
Some other folks have told me the same thing, and I understand the logic behind it; but I’d much rather put that extra cash into paying down my student loan debt or saving toward the down payment for another house or refinancing of my current one.
I’ve just set my % and have stuck to it. Sure I could dig into it during hard times (like now), but I look at it as disciplined savings. I have to be as disciplined in setting aside money as I am in spending. It is too bad that my rainy day fund is now gone, but I’m still very leary of pulling money out of retirement funds as if things actually get worse, then I might need it and it’s not all going away over night (even if it did lose several thousand over the last 3 weeks).
I’m still steadily investing in my pension plan; its just the extra deferred compensation that I’m bailing from for the time being. I’m considering starting up a College Advantage plan for Abraham, so I’ll likely start putting cash into that instead.
Very good to start doing that. My college advantage plan is called working at Notre Dame. As long as I’m employed here the kids can go here for room & board and to any other college for up to 80% of ND’s tuition. If you want I can always keep an eye open in the web dev office for you.