a math problem for you

B

B~C

New member
part A-
If Jimmy saves 30% of his gross earnings into retirement and defered comp and these accounts return a whopping negative 45%, how many years will Jimmy have to work to break even?

Part B-
Should Jimmy;
A) save more
B) save less and buy a Tomcat
C) just drink heavily
D) save nothing and just hope for a new socialist goverment where working is an option
E) Just be happy that he has a job
 
Not enough information.

How many years did Jimmy save 30%? If he did it for 30 years the good news is that he might have lost nothing but paper profits on those investments. He's not yet upside down, just teetering....

Jimmy should add these to his Part B-:

A: Be glad he saved sweat earned cash to supplement the fixed income he may or may not get when he reaches Social Security age.

B: Be glad he's not looking up at the lawn.

C: Buy a Tomcat, find or rent a Boy Toy Forecastle decoration, get 1000 tabs of industrial strength Viagra and go on a life changing "last Cruise".

D: Just be happy he has a job with a company that's not facing bankruptcy.
 
If Jimmy is lucky he's old enough to withdraw some of his savings and buy a C-Dory thus having something to show for his savings. Who would have ever though buying a boat would be a good investment?
 
marvin4239":16txg86g said:
Who would have ever though buying a boat would be a good investment?
Click to expand...

I've always considered the C-Dory to be the investment I could have made.

1. "3 Hots and a Cot", away from adverse weather conditions.
2. Takes care of all my recreational needs.
3. Provides me with an everlasting network of fine C-Brat buddies.
4. While cruising it provides me with ever changing great water front views.
5. Don't have to spend any money on a "shrink" to maintain my sanity.
6. Percentage of decrease in value of the boat is less than my other investments in the "market".
7. Chicks Love C-Dorys!......don't believe me?....just ask your wife..... :wink .
 
I like Dave's option! The question resembles reality for some fortunate folks, who still have a job and can keep up their life style. I learned of 5 people which my children know who can no longer make payments on their home in S. Calif. These folks are still working, but income is down or with load conversion the payments are way up. Sure you can say that they should not have pruchased the houses. But in S. Calif. there are few homes which are "affordiable".

The other question is how will those who are already retire and have their investments drop 45%, continue to live?

The options seem a bit grim currently! However I have faith that within the next 10 years that investments will improve...
 
I'll pass on commenting on the potentially politically significant part of Ken's original post, which I know was innocent, since I don't want Tyboo to have to lock THIS thread down!

My neighbor was mentioning another glum prediction. The first wave of Baby Boomers will reach 70.5 years of age in 2016. They (we) will be obligated to begin making mandatory withdrawals from their (our) IRAs. This wave of selling of the stocks in their (our) IRAs will cause additional downward pressure on their value, further delaying any economic recovery. Sombody refute this, PLEASE!



 
Jimmy has never planned on SSI and has been saving for many years, Jimmy believes he is damn fortunate to have not just retired and have to adjust his lifestyle to the market, Jimmy believes that in the long run it will all work out, Jimmy also believes he'll go to the SBS and enjoy a beer :)

more math...screw Jimmy
If you're cruising along with your Honda outboard at 4,000 rpm, in one cylinder, how many times is that intake valve opening
 
Pat, I've read of the baby boomer retirement issue, don't sound good.
I should point out that Jimmy is just a hypotheical person with a hypothetical situation........but I do plan on probably working until I am looking up at the sod
 
Hey Pat,

Just because one takes out of an IRA, it doesn't mean it can't go into another investment. Maybe all those boomers will buy C-Dorys and really give the industry a boost! :wink:

Ken, at one time, we thought we might do that "work 'till we die" plan. Thank goodness that didn't work out for us. :wink: Not saying that we might not go back to work sometime (after all, I did try that last summer :roll: ), but I'm sure hoping I don't take my last breath at work!

Best wishes,
Jim (not Jimmy)
 
B~C":ggaz6o2r said:
part A-
If Jimmy saves 30% of his gross earnings into retirement and defered comp and these accounts return a whopping negative 45%, how many years will Jimmy have to work to break even?

Part B-
Should Jimmy;
A) save more
B) save less and buy a Tomcat
C) just drink heavily
D) save nothing and just hope for a new socialist goverment where working is an option
E) Just be happy that he has a job
Click to expand...

I too will avoid the political commentary but I say if Jimmy has a reasonable expectation of continued income he should choose option B and ride out the downturn.
 
Pat,

My sense is that an increasing percentage of Americans are investing in the stock market through 401K's and other mechanisms. In the 50's and 60's very few blue and even white collar workers had money in the market. Now it's far more commonplace. I think that trend will continue in the long run and may make up for the boomers withdrawing in 2016.

Ken - three words - dollar cost averaging. Keep buying at a continuous rate and you make money. When the market is down, you buy more stock for the same $. Just my two cents worth. Of course that's easy for me to say as I'm approaching my peak earning potential in a down market and assume the market will recover before I need to retire.
 
B~C":1jzq9wxo said:
that spawns an other question Matt, what hull design would ride out a downturn better?
Click to expand...

Ha ha - well that would depend on available purchase price! It would be interesting to compare the discount % available on the various models. For example, if Tomcat's can be had for $100K, that's about a $20K discount compared to new. In pure dollars I would have to say the Tomcat. You may be hard pressed to find a $20K discount on any of the other models.
 
PaI
I don't see any major impact directly by the "withdrawals" from IRA's. I have been drawing on my mandatory IRA/401 for several years, and the way it is structured, the principle has not decreased. The money is still invested. Assuming that the government doesn't own everything by 2016, I see the market recovering. It may not yet be back at a Dow of 14000, but it will be back up. I see a far greater danger of hyper inflation, despite immediate stagnation and transcient deflation.

However we will see a different health care structure and perhaps retirement system in the next few years. I agree with cost averaging-you just have to keep investing and take the downs with the ups.

As for the best C Dory for the downturn--the C Dory 22. It has it all, at a low price and floats on its lines!
 
Pat-For 2009 at least, the "mandatory" 70 1/2 withdrawl has been, well, withdrawn ( put on hold). By the way, as a 72 1/2 year old geezer, my "mandatory calculation" is based on a life expectancy of 24 1/2 years! Is that good news or bad? :?
 
Marty, I think 96.5 years old looks pretty darn good! I saw Albert D. Rosellini on TV the day before yesterday, looked dapper, very sharp mind - the TV commentator said after the spot that the former Washington gov (and namesake of the SR 520 bridge) is 99. I didn't even know he was still alive. Patty and I visited our college landlady in the "home" quite a few years ago (we remained in touch over all the years), she said she thought 92 would be great, until she was 91...who knows what time we have? Somebody here has a great tag line: "It isn't how many days you take a breath, it is how many days take your breathe away."


dotnmarty":15bmi8zc said:
Pat-For 2009 at least, the "mandatory" 70 1/2 withdrawl has been, well, withdrawn ( put on hold). By the way, as a 72 1/2 year old geezer, my "mandatory calculation" is based on a life expectancy of 24 1/2 years! Is that good news or bad? :?
Click to expand...
 
Since I'm one of those who at one point in my life thought I was going to develop a career in finance rather than science, I begain doing my own taxes and I still do all of my own taxes in the late 60s early 70s (the past 11 years employing TurboTax yearly).

Well, at one point in time, the average citizen could employ income averaging over a five year period. That was eliminated for the average income citizen and, I believe, someone correct me here if I'm wrong, but income-averaging is only applicable to farming now.

It would be nice to see the IRS bring back income averaging for tax payers over the next 5-10 years to assist those who find themselves out of jobs as the unemployment increases, and many tax payers watch their yearly income come crashing down, incease, level off, etc.

IMO, it might help level the field & provide some warranted tax relief to many taxpapers without overburdening our tax system while we bail out from this recession.

My 0.02 and not a penny more :beer :mrgreen: :beer
 
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