General Discussion

Major Nikon

(36,925 posts)

72. Assuming an 8% return is not a logical fallacy

Reply to Mosby (Reply #60)

Mon Aug 5, 2013, 04:26 PM

Aug 2013

Edit history

Please sign in to view edit histories.

Recommendations

0 members have recommended this reply (displayed in chronological order):

129 replies

= new reply since forum marked as read

Highlight:

The Great American Do-It-Yourself Retirement Fraud, Brought to You By Big Finance & Co. [View all] xchrom Aug 2013 OP

If not for the Bush crash, I might have made it. B Calm Aug 2013 #1

Same here. I have NOTHING to show for those eight years. lastlib Aug 2013 #4

Not many people can afford to save 30% of their salary muriel_volestrangler Aug 2013 #106

I understand that. I worked many years with B Calm Aug 2013 #107

The 401K was designed to make someone rich liberal N proud Aug 2013 #2

Ok now ceonupe Aug 2013 #3

Kudos to you ....... dothemath Aug 2013 #5

The only people ceonupe Aug 2013 #11

That reads like spam... CBHagman Aug 2013 #93

Sorry ceonupe Aug 2013 #109

What the hell is this? PETRUS Aug 2013 #7

Pensions ceonupe Aug 2013 #18

Self-defeating idiocy PETRUS Aug 2013 #41

By all means get out of debt. ceonupe Aug 2013 #43

Your response is a non-sequitur. PETRUS Aug 2013 #79

How so ceonupe Aug 2013 #80

Here ya go: PETRUS Aug 2013 #82

Pension plans were DEFERRED PAY from employees as they worked their whole lives SoCalDem Aug 2013 #76

^^^THIS^^^^!! NickB79 Aug 2013 #81

The key is to start young and keep at it Major Nikon Aug 2013 #8

$50K. How many part time, minimum wage, no benefit jobs does that entail to make that much? RC Aug 2013 #10

The same formula works no matter how much you make Major Nikon Aug 2013 #12

Yes, but saving 15% of yr $20,000 per yr income is infinitely more difficult than saving 15% Nay Aug 2013 #44

Like the old saying says... Major Nikon Aug 2013 #71

Actually, the amount of shit eaten would be the same, more bread does not decrease the shit. nt Mnemosyne Aug 2013 #95

You're assuming the entire sandwich is eaten Major Nikon Aug 2013 #96

Point taken. nt Mnemosyne Aug 2013 #115

Yep ceonupe Aug 2013 #14

I've always felt comprehensive financial planning should be taught in high school Major Nikon Aug 2013 #19

Assuming an 8% return over 20 years seems as realistic as assuming a 9%, 20% or any other return. AnotherMcIntosh Aug 2013 #22

The S&P 500 has averaged 8.2% over the past 30 years Major Nikon Aug 2013 #27

True but many of the ceonupe Aug 2013 #29

You agree that it works, then argue that armatures (sp?) who do it different will get burned. cbdo2007 Aug 2013 #53

No not arguing anything ceonupe Aug 2013 #55

"Past Performance Does Not Guarantee Future Results" Mosby Aug 2013 #60

Assuming an 8% return is not a logical fallacy Major Nikon Aug 2013 #72

probably not directly but it's an unprovable assumption. Mosby Aug 2013 #86

I can't prove the sun will rise tomorrow either Major Nikon Aug 2013 #90

The average return on it over the last 15 years (1997-2012) was 4.47% muriel_volestrangler Aug 2013 #113

Which convieniently includes the time period at the end of the 80-90's surge and Bush's recession Major Nikon Aug 2013 #116

After inflation, the 30 year range is more like 4.3% to 8.1% muriel_volestrangler Aug 2013 #118

I didn't say after inflation Major Nikon Aug 2013 #126

Just sayin' jeffrey_pdx Aug 2013 #92

No, the S&P 500 DOESN'T provide "consistent returns." Common Sense Party Aug 2013 #69

Important if true. But if a person anticipates walking across a lake with an average 5' depth, AnotherMcIntosh Aug 2013 #31

That simply underscores the need for comprehensive financial planning Major Nikon Aug 2013 #73

That's what this guy said. AnotherMcIntosh Aug 2013 #75

Grifters of all sorts exist in our society Major Nikon Aug 2013 #77

At $7.15 per hour, how many jobs do you propose they have? If they have a family, are they supposed appleannie1 Aug 2013 #36

i would hope this president ceonupe Aug 2013 #117

Check your math FreeJoe Aug 2013 #56

I forgot to add the yearly contribution Major Nikon Aug 2013 #70

YMMV FreeJoe Aug 2013 #83

I can't afford to contribute now; I certainly couldn't than when I had massive student loans. alarimer Aug 2013 #89

I can't agree that it's a scam and a fraud Major Nikon Aug 2013 #91

yep. That's the lie. That's the carrot they stick in our faces. Those of us who know people who work liberal_at_heart Aug 2013 #97

Where Do You Live RobinA Aug 2013 #124

The secret is not to live at or beyond your means Major Nikon Aug 2013 #128

You're in a demographic bottleneck. you'll do fine Recursion Aug 2013 #16

Clearly, you don't understand how it really works either, and the worst part is that you probably Egalitarian Thug Aug 2013 #23

I don't disagree totally ceonupe Aug 2013 #28

That just demonstrates the problem. There are these peculiar institutions we call banks that Egalitarian Thug Aug 2013 #42

Well said. moondust Aug 2013 #54

These are the stories they bury, and when they do surface they are ignored or diminished Egalitarian Thug Aug 2013 #68

Yep. THAT is the very problem. If you're unlucky enough.... socialist_n_TN Aug 2013 #85

I think that you are being too harsh FreeJoe Aug 2013 #84

Kicked and Recommended. nt Enthusiast Aug 2013 #6

Spread Far and Wide. 401(k) is a lot more sexy a term than "dying at your desk". HughBeaumont Aug 2013 #9

Actually that goal is not all that unrealistic if you are highly motivated Major Nikon Aug 2013 #24

Keep sellin that BS salib Aug 2013 #35

So everyone who saves for retirement is making theirs off of others? Major Nikon Aug 2013 #74

that is how capitalism and the market work. Someone else's stock has to be going down for liberal_at_heart Aug 2013 #98

Actually that's not how the stock market or the real estate market works Major Nikon Aug 2013 #105

You will never, ever get seriously disabled in a car wreck eridani Aug 2013 #103

I don't make 100k/year. HughBeaumont Aug 2013 #108

Look at it this way Major Nikon Aug 2013 #111

"That's why no one can retire" - Huffington Post says the opposite wercal Aug 2013 #25

All too true. Plus, if your house is paid off, you are still not out of the woods. In some AnotherMcIntosh Aug 2013 #26

In most states ceonupe Aug 2013 #30

No, the point is that local property taxes can finance more than just the police and the schools. AnotherMcIntosh Aug 2013 #33

No that is my point ceonupe Aug 2013 #37

The parasites use the Horatio Alger scheme to sell their snake oil. Egalitarian Thug Aug 2013 #40

The dirty little secret is that you WON'T be "dying at your desk." You get forced out way before CTyankee Aug 2013 #114

K & R ctsnowman Aug 2013 #13

The demographic problem hits 401ks much harder than SS Recursion Aug 2013 #15

Please see the article about excessive 401(k) fees in the September issue of Consumer Reports mahatmakanejeeves Aug 2013 #17

^^this^^ I was just looking foir the link but you beat me to it. eridani Aug 2013 #100

k/r marmar Aug 2013 #20

My theory on 401k's wercal Aug 2013 #21

If you have a dozen Mutual Funds..... A HERETIC I AM Aug 2013 #46

Well I haven't really blamed anyone for anything, have I? wercal Aug 2013 #47

No, I don't suppose you have.... A HERETIC I AM Aug 2013 #49

your point is a good one. who has time to do due diligence on 500 companies? that's a task HiPointDem Aug 2013 #63

I would call it an unholy collision of various forces wercal Aug 2013 #64

+1 uponit7771 Aug 2013 #57

The only thing more effective than voting Republican is investing Republican. raouldukelives Aug 2013 #32

Very well said. Corruption Inc Aug 2013 #50

It is incredibly sad. raouldukelives Aug 2013 #125

I guess all the people I talk to every day that are saving plenty in their 401(k) plans don't exist. Common Sense Party Aug 2013 #34

Maybe we should all buy tulips. AnotherMcIntosh Aug 2013 #39

The smug top 20% of earners certainly do exist eridani Aug 2013 #102

Absolute nonsense. I talk to people all the time who earn modest incomes Common Sense Party Aug 2013 #112

Those are well-paid bluecollar jobs eridani Aug 2013 #127

You have no idea who I talk to, Chicken Little. Common Sense Party Aug 2013 #129

How has a 401K left anyone with "very little at all"??? That doesn't make any sense. cbdo2007 Aug 2013 #38

When the market is down, so is your 401K and you don't always get that back when the market goes up liberal N proud Aug 2013 #45

You only lose all of that if you sell. The market has fully recovered + more since 2008 cbdo2007 Aug 2013 #52

The market has Mutt Funds that track them have not, 85% fail thier own indexs they're uponit7771 Aug 2013 #58

I'm up 75% on money put into my 401K this year.... cbdo2007 Aug 2013 #59

That's not the broader range of mutt funds, they're not back to where the SHOULD be right now uponit7771 Aug 2013 #61

That is 5 years of earning power of that money that I lost in 2008 liberal N proud Aug 2013 #62

You have the same number of shares. Common Sense Party Aug 2013 #66

Pensions will be there - 401K Might be there liberal N proud Aug 2013 #110

Pensions will be there? You have been reading the news lately, right? n/t hughee99 Aug 2013 #119

Yea, companies are killing pensions in favor of gambling on 401K's liberal N proud Aug 2013 #120

Companies (and cities) are also taking away pensions through bankruptcy. hughee99 Aug 2013 #121

No - they just have a recession to run off with it. liberal N proud Aug 2013 #122

Really? A recession for a few years over the course of 30+ years of retirement planning hughee99 Aug 2013 #123

kr HiPointDem Aug 2013 #48

Time for a juicy reverse retirement shit sandwich Blue Owl Aug 2013 #51

Yes, the 401K is terrible compared to the defined benefit pension, but OutNow Aug 2013 #65

The other big benefit of the 401(k) is they actually exist. Common Sense Party Aug 2013 #67

There are other benefits as well and defined pensions weren't without their own faults Major Nikon Aug 2013 #94

Thanks. JDPriestly Aug 2013 #78

They are SO helpful. Octafish Aug 2013 #87

K & R !!! WillyT Aug 2013 #88

. blkmusclmachine Aug 2013 #99

I had to cash in my 401k DonCoquixote Aug 2013 #101

This has always angered me. bluestateboomer Aug 2013 #104