Staying put and buying the dip.
A Market Trifecta ( Non Political )
- Thread starter Narragansett
- Start date
I have money in a SEP account and IRAs but we have rent houses that are the main thing we are depending on for retirement in the future. I'm in construction so I know a little bit about rent houses and they have their headaches but I still trust them than more the stock market. I still remember 2008 when hardly no one expected the mortgage bundling fiasco that sent a lot of people into bankruptcy. The bad thing about thing about the market is when you retire, if the market takes a really big hit and stays down for several years while you're pulling money out to live on the balance can get really low and never build back to what it was.
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The market causes ulcers only when you worry about it.
No, it's not like they have to keep cash in a bank to pay all of their pension obligations. They invest the money in a variety of ways, including in the stock market. The minimum required present value of all of those investments is tied (by complicated algorithms that I'm not sure anyone completely understands -- I certainly don't) to the amount of their future obligations. The present value, however, does not have to be enough to completely cover 100% of their future obligations. The assumption is that the investments will make money over time that will -- when the time comes -- allow them to pay what they have to.
Okay, I won't tell you. But someone probably ought to. Actually, I guess I will tell you.
Like with pensions, the money to pay annuities is not just sitting in a bank; it is invested (including in the stock market). There are a variety of rules in place that make it pretty unlikely that a company will ever default on its annuity contracts.
Unlikely, but not impossible. It has happened in the past. If the economy goes deeply enough into the toilet, and the stock market crashes badly enough (neither of which is likely in the immediate future) then it it inevitable that some companies will default on annuity payments. Here's hoping that YOURS is managed conservatively enough that it wouldn't be one of those.
Ματθιας;142205144 said:
Through appropriations
GypsmJim
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I know people that have "rent houses". Good or bad, some of his units are in poorer neighborhoods. Back in the plandemic, some of his tenants that were on welfare had no issues paying the rent. But others that were responsible people in the workforce lost their jobs. Of course the govmnt gave them the ability to defray their rent payments. Good for them, but the rent house owners still had taxes and utilities and upkeep to take care of.
I hope your buildimngs are inhabited by good people.
I have watched the markets go up and down for decades. I retired 2.5 years ago and between SS, my pension and plenty of cash in the bank I am making more than when I worked. Not planning on touching my 401K until I have to start making RMD's in about 10 years. I fully expect that when all the backdoor tariff negotiations are done things will settle down again. Just tired already of the media with all of their 'The sky is falling!' rhetoric.
We have 3 sources of retirement income. Both of us have social security and that alone is enough for us to live fairly well, with no debt. At 50 I stopped working on cars for a living and started building houses. Now we have sold the two houses I built and the bank is paying us to use our money and it's insured.
That is almost $30k in interest income this year.
No significant long term debt in 33 years. We save 3/4 ths of our income. All household expenses that we share are $1025 a month and we made close to $100k last year and paid 7.5% federal income taxes.
Wife's retirement is about 40% of our combined income.
Every time I try the stock market it's a catastrophe.
That is almost $30k in interest income this year.
No significant long term debt in 33 years. We save 3/4 ths of our income. All household expenses that we share are $1025 a month and we made close to $100k last year and paid 7.5% federal income taxes.
Wife's retirement is about 40% of our combined income.
Every time I try the stock market it's a catastrophe.
Currently pensions in US corporations are required to be insured in a pension benefit corporation. My former employer in a bankruptcy situation went below 70% insured and had to inform each person covered, vested and each person contributing. That notification comes if you dip below 80% insurance coverage. I was told that most companies try to keep an 85% coverage. [I was a union rep].
In the US, if bankruptcy occurs, the order of payments are: pensions, current benefits for employees, and lastly shareholders.
This market has been riding on Fed juice for way too long and is in need on a major correction to get healthy.
The banks need to reduce the risk in their portfolios or we may see another huge assets wipe-out and big bank shuffle.
Historically, the P/E ratio for the S&P 500 is about 18. Currently, the P/E ratio is nearly 29. Hardly time to cheer for this bloated group. More juice than substance.
TLT may be a safe place to watch the approaching storm.
The banks need to reduce the risk in their portfolios or we may see another huge assets wipe-out and big bank shuffle.
Historically, the P/E ratio for the S&P 500 is about 18. Currently, the P/E ratio is nearly 29. Hardly time to cheer for this bloated group. More juice than substance.
TLT may be a safe place to watch the approaching storm.
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Different title suggestion
Tri-Floptia
Bekeart
three strikes and out
Tri-Floptia
Bekeart
three strikes and out
Well said……..
