Frontline--The Retirement Gamble

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Re: Frontline--The Retirement Gamble

Postby Leesbro63 » Mon Apr 29, 2013 12:53 pm

HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.
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Re: Frontline--The Retirement Gamble

Postby Spades » Mon Apr 29, 2013 1:01 pm

Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.



Yeah, if you have a winner (+1) and a loser (-1), doesn't that make Wall Street a zero sum game? 1-1=0? A win-win game is where both can be winners, for example, I buy beer (winner) and the seller (winner) gets cash.

:sharebeer
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Re: Frontline--The Retirement Gamble

Postby Don46 » Mon Apr 29, 2013 1:13 pm

Spades wrote:I think what has happened is that our education system and families are not grasping the reality of today's America. Do you think all 18 year olds should know something about investing? I do. We educate them for the purpose of benefiting the nation and preparing them to enter the workplace right?

I also think it's wrong that we should expect our employer to look out for our retirement. The employer should be focused on providing goods or services for the economy with labor and resources, though them taking the risk of investing my money might be negotiable.

Let's teach a man to fish instead of handing it to them.

:sharebeer


I thought the Frontline show revealed employers who, in exchange for kickbacks, were, in effect, endorsing retirement plans that were not in the best interest of the employees but in the best interest of the mutual fund industry. It also showed that the fees the mutual fund companies charge are obfuscated so that even a highly educated person like Hiltonsmith had to spend hours deciphering just what he was being charged. Why not reform this system and protect investors/workers along with educating them?
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Re: Frontline--The Retirement Gamble

Postby Spades » Mon Apr 29, 2013 1:41 pm

Don46 wrote:
I thought the Frontline show revealed employers who, in exchange for kickbacks, were, in effect, endorsing retirement plans that were not in the best interest of the employees but in the best interest of the mutual fund industry. It also showed that the fees the mutual fund companies charge are obfuscated so that even a highly educated person like Hiltonsmith had to spend hours deciphering just what he was being charged. Why not reform this system and protect investors/workers along with educating them?


Agreed and maybe even a better solution! Though, how do we get the reform to happen.......
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Re: Frontline--The Retirement Gamble

Postby meowcat » Mon Apr 29, 2013 2:23 pm

It is *your* money. It belongs to you. When it is removed from your posession without you knowing about it, it's called theft, and it's illegal. The bottom line is, if you are going to take money from me, you need to tell me how much you're taking, when you're taking it, and why. You need to make it very clear to me, this schedule, because in my mind, intentionally trying to hide what you're taking from me is theft, plain and simple. Why the SEC can't understand this is beyond me.

It should appear on your quarterly statement in very large bold text:

Dollar amount withrawn from portfolio to cover all expenses: $7,251.28 (breakdown of all expenses required)
As a percentage of your total portfolio: 1.3%

Anything above and beyond that is theft. Burying it fine print or making it difficult to find is intentional and it should be illegal.
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Re: Frontline--The Retirement Gamble

Postby Don46 » Mon Apr 29, 2013 5:10 pm

Spades wrote:
Agreed and maybe even a better solution! Though, how do we get the reform to happen.......


Oh, that may be more difficult! One point the film made was that the mutual fund industry has a very powerful lobby and it would take much more public outrage and some effective politicians, who seem to be in short supply these days, before anything changes. I often wonder why more politicians have not tried to appeal to what must be a widespread sense of resentment toward "sinister forces on Wall Street plundering our savings" etc. Most of the people on the Frontline series seemed more distraught than angry.
Where are the lobbyists for workers and investors?
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Re: Frontline--The Retirement Gamble

Postby gerrym51 » Mon Apr 29, 2013 5:24 pm

brokerages and mutual funds are a business. they have to make some money. we'ed only be happy if they charged-ZIP. what is a reasonable rate is what matters. :mrgreen:
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Re: Frontline--The Retirement Gamble

Postby Rager1 » Mon Apr 29, 2013 5:30 pm

Don46 wrote:(snip)...Where are the lobbyists for workers and investors?


Unfortunately, there's only one and his name is Jack Bogle.

Ed
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Re: Frontline--The Retirement Gamble

Postby mptfan » Mon Apr 29, 2013 5:35 pm

Don46 wrote: Why not reform this system and protect investors/workers along with educating them?

Because the financial industry makes billions of dollars off of the current system.
I eat risk for breakfast. :)
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Re: Frontline--The Retirement Gamble

Postby HardKnocker » Mon Apr 29, 2013 6:06 pm

Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.


Oops! I mixed that up. :(

I meant "Wall Street is a zero sum game."
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Re: Frontline--The Retirement Gamble

Postby Polar_Ice » Mon Apr 29, 2013 6:55 pm

Another opinion on the episode:

http://vanguardblog.com/2013/04/29/the-401k-debate/

The film started with two misconceptions. The first is that most Americans aren’t prepared for retirement. That’s an over-exaggeration (see my previous post on this issue). Yes, it’s great TV to profile those who are struggling with saving for retirement. There are lessons to be learned and shared. But when you focus exclusively on that group, you do give the misleading impression that everyone is getting it wrong, which is untrue.
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Re: Frontline--The Retirement Gamble

Postby Leesbro63 » Mon Apr 29, 2013 7:17 pm

HardKnocker wrote:
Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.


Oops! I mixed that up. :(

I meant "Wall Street is a zero sum game."


That's still not correct. "A rising tide lifts all boats" is a better analogy.
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Re: Frontline--The Retirement Gamble

Postby Boglenaut » Mon Apr 29, 2013 7:30 pm

Leesbro63 wrote:
HardKnocker wrote:
Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.


Oops! I mixed that up. :(

I meant "Wall Street is a zero sum game."


That's still not correct. "A rising tide lifts all boats" is a better analogy.


Agreed, as long as you don't put one foot in my boat instead of yours!
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Re: Frontline--The Retirement Gamble

Postby Cut-Throat » Mon Apr 29, 2013 7:58 pm

Boglenaut wrote:
Leesbro63 wrote:
HardKnocker wrote:
Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.


Oops! I mixed that up. :(

I meant "Wall Street is a zero sum game."


That's still not correct. "A rising tide lifts all boats" is a better analogy.


Agreed, as long as you don't put one foot in my boat instead of yours!


What a lot of people don't understand is that we are all in the same boat.
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Re: Frontline--The Retirement Gamble

Postby ElJay » Mon Apr 29, 2013 8:04 pm

Grt2bOutdoors wrote:If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?

The education I got in school about finances was terrible. They told me how to balance a checkbook, but the "investment" part of the class was about trying to pick stocks. I think we could only choose one and we were forced to sell it and buy something else every week. I think I nearly came in dead last in that competition. I didn't discover mutual funds until my late 20s when the owner of a business I worked for sicked his Edward Jones agent on me. Luckily I only paid a few hundred dollars in loads and fees before I found this place and Vanguard. (I could not stand the idea of starting every contribution with a 5.75% loss and figured there must be a better way...)
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Re: Frontline--The Retirement Gamble

Postby gisborne » Mon Apr 29, 2013 11:22 pm

Grt2bOutdoors wrote:
mike143 wrote:I am afraid of the retirement bail out that is going to be required in the future. I don't want my hard work and sacrifice to be distributed to those that refused to do the same. I really wished that hey taught financial well being in high schools or even earlier. It took a few years of making the wrong choices, realizing the hole I was in, and start digging myself out, to learn. Now I am out of the hole and at the base of the mountain with all my tools at the ready.


If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?


The same can be said about almost any subject that teachers teach. Most teachers can't do more than middle school math. Most teachers aren't well versed in writing skills. Most teachers aren't knowledgeable about history. That doesn't mean that each teacher isn't proficient in their own domain. It would be absurd to think that they would randomly choose a teacher to teach finance, just like it would be absurd to think that they would randomly select a teacher to teach math, or language arts, or history.
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Re: Frontline--The Retirement Gamble

Postby gisborne » Mon Apr 29, 2013 11:31 pm

I didn't like John Bogle's comment about persisting mutual fund returns, part of which were:

"The high likelihood is when you get to somebody at his peak, he's about to go down in the valley. The last shall be first and the first shall be last."

This is false. If it wasn't, it would be easy to make lots of money selling short etc. Something at its peak is not more likely to go down than up, its just not more likely to go up than down (and I might even be wrong on that last part, not current on my momentum research).
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Re: Frontline--The Retirement Gamble

Postby meowcat » Tue Apr 30, 2013 6:55 am

gisborne wrote:Something at its peak is not more likely to go down than up, its just not more likely to go up than down

That is a contradictory statement, did you mean to say that?
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Re: Frontline--The Retirement Gamble

Postby bUU » Tue Apr 30, 2013 7:08 am

I think s/he meant to say, "Something at its peak is not more likely to go down than up, just like its not more likely to go up than down."
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Re: Jack says pay 1% to own the US stock market?

Postby Spades » Tue Apr 30, 2013 7:51 am

umfundi wrote:
arcticpineapplecorp. wrote:
Also, 1% wipes out 25.8% of one's portfolio over 30 years (from http://vanguardblog.com/2011/10/28/stop ... f-returns/)

Here is the table from that Vanguard blog:
Code: Select all
Cumulative impact of fees on ending wealth at various time horizons
                                        Annual Fee Rate
Time Horizon      0.10%      0.25%      0.50%      1.00%      2.00%      3.00%
    3 years      –0.3%      –0.7%      –1.5%      –2.9%      –5.8%      –8.5%
    5 years      –0.5%      –1.2%      –2.5%      –4.9%      –9.4%     –13.7%
   10 years      –1.0%      –2.5%      –4.9%      –9.5%     –18.0%     –25.6%
   20 years      –2.0%      –4.9%      –9.5%     –18.0%     –32.7%     –44.6%
   30 years      –3.0%      –7.2%     –13.9%     –25.8%     –44.8%     –58.8%
   40 years      –3.9%      –9.5%     –18.1%     –32.8%     –54.7%     –69.3%

I must admit this is a revelation to me. I had never thought of the impact of fees and expenses in this way.

Keith


I wanted to return to this table because I forget how crucial it is to reduce our fees. Thanks for putting this up umfundi.
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Re: Frontline--The Retirement Gamble

Postby Best of Both Worlds » Tue Apr 30, 2013 6:44 pm

Those more knowledgeable will continue to take advantage of those less educated in investing matters. It is also far easier to blame the financial community for your predicament than to take ownership of the fact that your savings rate is insufficient. Higher fees are another excuse, and even if rectified, I suspect will have minimal impact on whether investors are prepared for a 20-30 year retirement horizon.
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Re: Frontline--The Retirement Gamble

Postby Strevlac » Tue Apr 30, 2013 7:30 pm

HardKnocker wrote:
Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.


Oops! I mixed that up. :(

I meant "Wall Street is a zero sum game."


It is indeed possible for all market participants to "win". If you define "win" as "earn what the market earns".

Outperforming the market, now that is a zero sum game.
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Re: Frontline--The Retirement Gamble

Postby Rosco » Tue Apr 30, 2013 8:41 pm

Anyone know the formula for figuring return when you begin with an initial investment and then add a fixed amount each month over a number of years and you compound monthly or quarterly...
I get the annual compounding formula M=P(1+i)n
but I get a little lost when we start adding variables... I'm trying to explain how Bogle got to the number he did over a 50 year horizon... Though with annual compounding I got to 60% to fund; 40% to owner. Sorry for the arithmetically challenged question. S
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Re: Frontline--The Retirement Gamble

Postby LadyGeek » Tue Apr 30, 2013 8:54 pm

Here's the basics: Comparing Investments - Setup the problem using a cash flow diagram and the 6 financial variables.

I'll bet you never expected a homework problem in the middle of this thread. :)
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Re: Frontline--The Retirement Gamble

Postby Rosco » Tue Apr 30, 2013 10:21 pm

Thanks for the link... sometimes calculators give disparate results so that helps. S
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Re: Frontline--The Retirement Gamble

Postby StaTiK » Wed May 01, 2013 8:21 pm

High fees are bad, yes, and people will charge them if allowed. No argument there. But high fees and poor fund options are issues that savers need to concern themselves with.

"Half of all Americans say they can’t afford to save for retirement. One third have next to no retirement savings at all."

ROBERT HILTONSMITH: Age 31, annual salary $61,000 retirement savings $8,000.
CRYSTAL MENDEZ: Age 32, annual salary $70,000 retirement savings $115,000.
MARK FEATHERSTON: Age 54, unemployed, retirement savings $80,000
LAURA FEATHERSTON: Age 48, annual salary $70,000 retirement savings $20,000.
BOB WOOD (semi-retired): Age 67, part-time salary $25,000 retirement savings $500,000.

To me the show seemed to imply that Americans will never retire because greedy companies stopped offering pensions which forced workers to use 401k accounts where other greedy companies steal it through high fees. My friends aren't broke because they have a 2% expense ratio on their retirement funds; they're broke because they make payments on a big house, a new car, a timeshare, a jet ski, and an iPhone.
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Re: Frontline--The Retirement Gamble

Postby elgob.bogle » Thu May 02, 2013 3:10 pm

Conspiracy Theorists - Is it possible/probable that this part "one-tenth of" had been edited out of "for one-tenth of 1 percent" before the release of the broadcast?

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Re: Frontline--The Retirement Gamble

Postby LadyGeek » Thu May 02, 2013 5:19 pm

I don't know, but remember that conspiracy theory is off-topic.
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Re: Frontline--The Retirement Gamble

Postby Diogenes » Fri May 03, 2013 4:16 pm

StaTiK wrote:High fees are bad, yes, and people will charge them if allowed. No argument there. But high fees and poor fund options are issues that savers need to concern themselves with.

"Half of all Americans say they can’t afford to save for retirement. One third have next to no retirement savings at all."

ROBERT HILTONSMITH: Age 31, annual salary $61,000 retirement savings $8,000.
CRYSTAL MENDEZ: Age 32, annual salary $70,000 retirement savings $115,000.
MARK FEATHERSTON: Age 54, unemployed, retirement savings $80,000
LAURA FEATHERSTON: Age 48, annual salary $70,000 retirement savings $20,000.
BOB WOOD (semi-retired): Age 67, part-time salary $25,000 retirement savings $500,000.

To me the show seemed to imply that Americans will never retire because greedy companies stopped offering pensions which forced workers to use 401k accounts where other greedy companies steal it through high fees. My friends aren't broke because they have a 2% expense ratio on their retirement funds; they're broke because they make payments on a big house, a new car, a timeshare, a jet ski, and an iPhone.
-StaTiK-

+1 Very true. These same people would now like to believe it the the greedy mutual fund companies that are stealing their money via fees.

Also, Hiltonsmith funded his PhD via a 'grant', which means someone else paid for it, and also took out a loan to pay for his Masters. Seems he likes to go to school. While not a problem, being a career student is not always the best way to fund your retirement.

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Re: Frontline--The Retirement Gamble

Postby mickeyd » Fri May 03, 2013 4:39 pm

While not a problem, being a career student is not always the best way to fund your retirement.


Hiltonsmith is now a TV star and an "eminent authority" on retirement fees and mutual funds in general. Does anyone doubt that he will not be able to wrangle another "grant" so he can complete his study and find out what we Bogleheads already know?

Makes me think~Why do entities make grants to people to study mundane stuff? How can I get into that racket? :oops:
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Re: Frontline--The Retirement Gamble

Postby texasdiver » Fri May 03, 2013 9:48 pm

Spades wrote:
Leesbro63 wrote:
HardKnocker wrote:Wall Street is not a zero-sum game.

For every winner there is a loser.


This is not correct.



Yeah, if you have a winner (+1) and a loser (-1), doesn't that make Wall Street a zero sum game? 1-1=0? A win-win game is where both can be winners, for example, I buy beer (winner) and the seller (winner) gets cash.

:sharebeer


Actually you can have one BIG winner and 10,000 small losers which is more often the scenario.
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Re: Frontline--The Retirement Gamble

Postby texasdiver » Fri May 03, 2013 9:59 pm

ElJay wrote:
Grt2bOutdoors wrote:If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?

The education I got in school about finances was terrible. They told me how to balance a checkbook, but the "investment" part of the class was about trying to pick stocks. I think we could only choose one and we were forced to sell it and buy something else every week. I think I nearly came in dead last in that competition. I didn't discover mutual funds until my late 20s when the owner of a business I worked for sicked his Edward Jones agent on me. Luckily I only paid a few hundred dollars in loads and fees before I found this place and Vanguard. (I could not stand the idea of starting every contribution with a 5.75% loss and figured there must be a better way...)


The problem is that HR and management at most school districts do an absolutely horrible job of providing advice. Basically they provide none at all. Most if not all public school teachers are covered by some sort of defined benefit pension and depending on the state this may supplement or replace social security. Here in Texas it replaces social security and is somewhat more generous to start but is not COLA'd. Then you are pretty much at the mercy of the sharks for coming up with additional investments. Rather than the employer picking one single 401(k) vender as is the case for most private employers, in education there are a big suite of venders who are all authorized to sell 403(b) products so teachers are often in worse shape than private employees because they are at the mercy of slick sales folks who prowl around, harvest teacher emails for direct mailing, and do all sorts of shady things like provide "free investment seminars" that turn into hard sell sales.

For example, here is the list of approved 403(b) venders for Texas (.pdf) http://www.trs.state.tx.us/403b/documen ... s_list.pdf Read it and weap when you see how many are selling variable annuities. Luckily Vanguard is on the list but hardly anyone uses Vanguard because you have to act as your own vender and do your own paperwork as if you were your own broker which confuses most teachers because they don't have a clue about this and the forms are all written for brokers not individuals. Any salesman for any company on that list can sign up any public school teacher in Texas for any kind of horrid load fund or variable annuity on the spot and the next pay period it starts sucking out of their paycheck.
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Re: Frontline--The Retirement Gamble

Postby mickeyd » Sat May 04, 2013 12:35 pm

texasdiver wrote:
ElJay wrote:
Grt2bOutdoors wrote:If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?

..)


Here in Texas it replaces social security .


Not always. Only SOME school districts have opted out of SS while others continue to pay SS and TRS contributions. This can happen in the same city/county as most lage cities have many (dozens?) of independent school districts.
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Re: Frontline--The Retirement Gamble

Postby stoptothink » Sat May 04, 2013 1:41 pm

mickeyd wrote:
texasdiver wrote:
ElJay wrote:
Grt2bOutdoors wrote:If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?

..)


Here in Texas it replaces social security .


Not always. Only SOME school districts have opted out of SS while others continue to pay SS and TRS contributions. This can happen in the same city/county as most lage cities have many (dozens?) of independent school districts.


Yes, although I was a consultant I was somehow considered a school district employee and paid both SS and TRS contributions. Reminds me that I need to get starting rolling over my TRS into my IRA because I left that job almost 8 months ago now.
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Re: Frontline--The Retirement Gamble

Postby beachplum » Sat May 04, 2013 2:25 pm

If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?[/quote]

The same can be said about almost any subject that teachers teach. Most teachers can't do more than middle school math. Most teachers aren't well versed in writing skills. Most teachers aren't knowledgeable about history. That doesn't mean that each teacher isn't proficient in their own domain. It would be absurd to think that they would randomly choose a teacher to teach finance, just like it would be absurd to think that they would randomly select a teacher to teach math, or language arts, or history.[/quote]

Wow, what school system, state do you live in where most of the teachers have poor writing/math skills. If they were that bad, they wouldn't have received certification where I live.
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Re: Frontline--The Retirement Gamble

Postby jwillis77373 » Sun May 05, 2013 7:35 am

I watched the show.

But thought it was not as good as the other Frontline show about the same subject matter [ Can You Afford to Retire? ] by Hedrick Smith in 2006.

The full show is available online.

http://www.pbs.org/wgbh/pages/frontline/retirement/

Taking place before the crash of 2008 it had a much more in depth assessment of all the issues, interviewed many of the same people earlier on and enlightened people as to what they could do.

The problem with this show was it didn't seem to build on that previous show as to specifically what a person could do, or perhaps follow up on the people that Hedrick Smith interviewed in similar circumstances.

This show felt like a [whole new] generation had rediscovered the retirement trap a mere 6 years later.

This show also didn't address the taxing issues of choosing to invest in different vehicles in taxable versus non-taxable accounts.. or even cover what those were.. No where were IRAs mentioned.. only 401ks.. nowhere were 403bs mention.. in fact 401ks could easily be confused with Pension plans.

It was a disappointment.

I was hoping they would build on the previous show.. review what happened to those other people 6 years later. And perhaps get into the Bonds versus Stocks or Indexed versus Total funds issues and how monetary policy could be effectively working against even doing the right things when saving for retirement.

There's a whole mindset too.. that if your going to fail at saving.. spend now before the money is worthless.. in effect "investing" in consumables or commodities in a barter fashion not unlike the 1930's reaction to fiscal policy.

Investment clubs or philosophies.. not unlike Bogle heads do exists.. some even exist around collections of public figures or books.. focusing on that and how they effect persons trying to turn their life around.. get out of debt and then get back into investing (which if you look at it seems ironically counter intuitive) would be more interesting.

Spending and gambling to the human brain must look a lot like Saving and investing.. I mean we seem to confuse and substitute them for the same thing all the time. The risk reward system in the brain for short term versus long term gratification seems to work in both cases.. but something must tell us they are different.. it just seems to come always externally imposed. Your bank account is empty.. you don't have enough to retire.. or your certain to run out of money before your retirement ends.

And yet somehow.. we always seem to find it easier to convince ourselves to take greater risk, rather than less.. whether it is spend now and not later, or day trade now and not later. We're impulsive problem solvers in that we will almost do anything rather than sit still and continue to consider our options rather than do something more risky even when the data seems to suggest doing nothing is the correct thing to do.

Jack Bogle has suggested we equate active trading to gambling in the short term and consider passive investing through risk assessment more akin to prudent planning. Its suggested we actively "filter out the noise" which might otherwise manipulate us into unwise rash even prideful actions. At some level it seems an appeal to our morals to learn to 'control ourselves' and our addiction to activity.

I would have preferred the show focused on those aspects.. how we have been and are currently being manipulated.. so we could learn to look at our problem objectively and learn to help ourselves.

Instead we got examples of people who had failed.. failed to notice the bigger picture.. done all the 'right' family decisions.. led with their heart.. and now have few if any options.. it appeared hopeless for them.

Even the 'option' of [working longer] is not really practical.. we all know [age] and infirmity catches up to people. Health fails, age discrimination exists.. what happens then? Even this show didn't dare go that far.. visit homeless shelters.. hospices.. despondent or estranged family members who were or were not looking after their parents.

Its not a pretty picture.. its not likely something we can legislate or tax our way out of.. but we may. Options, proposals, other than the [work longer] option which seems impractical. What would a younger person say? What would the experts say is possible or likely to happen if we do or do not do something about the problem on a personal and wider basis?

Sure a single person may get lucky.. or a diligent individual may attain enough to retire.. but what of all their relatives?

I've heard some people mention that people should "Realistically" consider expatriation to retire on whatever means that they have saved. Or consider relocating to less expensive regions of the country [before] they run out of funds. Or downsize their homes as quickly as possible once their kids leave home.

With the baby boomer generation maturing, the very meaning of the American Dream could be changing.

I could go on and mention the manipulation our credit card finances have done to change our perception of how much wealth we have.. until we don't.

Or what the drive for profits from stock holders did to many companies and then was used against them to invest in derivatives.. until there were no profits.

Each reaction seems to have an equal reaction on the playing field, of frenzied activity.. and only Jack seems to be saying.. a lot more thought, a little less action.. may be be called for here.
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Re: Frontline--The Retirement Gamble

Postby stoptothink » Sun May 05, 2013 10:17 am

beachplum wrote:If teachers are having a difficult time with their own retirement plans and finances, would you really want those who don't have a clue doing the teaching?


The same can be said about almost any subject that teachers teach. Most teachers can't do more than middle school math. Most teachers aren't well versed in writing skills. Most teachers aren't knowledgeable about history. That doesn't mean that each teacher isn't proficient in their own domain. It would be absurd to think that they would randomly choose a teacher to teach finance, just like it would be absurd to think that they would randomly select a teacher to teach math, or language arts, or history.[/quote]

Wow, what school system, state do you live in where most of the teachers have poor writing/math skills. If they were that bad, they wouldn't have received certification where I live.[/quote]

Off topic, but my GF's brother teaches junior high at a charter school. He only has a GED, no college whatsoever, and has the writing skills of about a 4th grader (literally). His 11yr old son uses better grammar (written and verbal), has better penmanship, and can do basic math better than he does. I would imagine that the majority of his students are more advanced than him in these foundational basics as well. He does teach computer skills classes, which he is informally knowledgeable about, but I don't understand how he even got an interview. I helped edit his resume, in its original form (before editing) I wouldn't have interviewed him to be the janitor and he doesn't come across in-person much better.

He's a nice enough guy, but it is pretty scary. I have worked with some amazing charters (KIPP) where the skill and education level of the teachers is very impressive, but I guess that isn't the case everywhere.
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Re: Frontline--The Retirement Gamble

Postby RobInCT » Sun May 05, 2013 10:58 am

stoptothink wrote:Off topic, but my GF's brother teaches junior high at a charter school. He only has a GED, no college whatsoever, and has the writing skills of about a 4th grader (literally). His 11yr old son uses better grammar (written and verbal), has better penmanship, and can do basic math better than he does. I would imagine that the majority of his students are more advanced than him in these foundational basics as well. He does teach computer skills classes, which he is informally knowledgeable about, but I don't understand how he even got an interview. I helped edit his resume, in its original form (before editing) I wouldn't have interviewed him to be the janitor and he doesn't come across in-person much better.

What state does your GF's brother live in? Please remind me never to move there. Many states have relaxed certification requirements for teachers in charter schools, meaning that they allow individuals without teaching licenses to teach in charter schools. However, I believe in most of those states (I would have said all before reading your post), those individuals are still required to have a bachelor's degree.

Agreed that teaching personal finance is a good idea but possibly impracticable. Economics was a required class in my high school, and I recall my teacher (who was then probably in his 60s) repeatedly telling us that his investment plan was and had been for many years to invest 100% in Coca-Cola stock.

Part of the problem with teaching investment in high school is that it really is a philosophy, and it would be hard to develop a neutral curriculum, and the laws keep changing. 401ks were relatively uncommon when I was in high school, and Roth IRAs didn't exist at all. Traditional IRA limits were $2000/year and had been $2000/year for over a decade. 529s didn't exist. Nor did HSAs. And I'm among the younger members of this forum. Social security is still the primary source of most people's retirement income in this country, but (not a political comment) does anyone think that even if this continues to be true 50 years from now (i.e. when current high school students reach retirement age) that the social security rules will still be the same as they are now? I think it's a good idea to teach students budgeting, checkbook balancing, the importance of saving for emergencies, etc. But it's hard for me to think of a class in high school that would address the problems raised in this program, which seem very related to current programs and current rules, which might have limited application even 10 years from now.
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Re: Frontline--The Retirement Gamble

Postby 1210sda » Sun May 05, 2013 11:12 am

jwillis77373 wrote:I watched the show.

But thought it was not as good as the other Frontline show about the same subject matter [ Can You Afford to Retire? ] by Hedrick Smith in 2006.

The full show is available online.

http://www.pbs.org/wgbh/pages/frontline/retirement/



Thanks Jwillis for posting the link. While watching, I noticed the ages of the audience at the retirement planning meetings......they were mostly in their 50's and 60's. If you haven't done most of it by then, it's probably too late. It would seem the approriate age for retirement planning is much younger than that. What does it take to motivate the younger folks to start planning NOW.
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Re: Frontline--The Retirement Gamble

Postby stoptothink » Sun May 05, 2013 11:24 am

RobInCT wrote:
stoptothink wrote:Off topic, but my GF's brother teaches junior high at a charter school. He only has a GED, no college whatsoever, and has the writing skills of about a 4th grader (literally). His 11yr old son uses better grammar (written and verbal), has better penmanship, and can do basic math better than he does. I would imagine that the majority of his students are more advanced than him in these foundational basics as well. He does teach computer skills classes, which he is informally knowledgeable about, but I don't understand how he even got an interview. I helped edit his resume, in its original form (before editing) I wouldn't have interviewed him to be the janitor and he doesn't come across in-person much better.

What state does your GF's brother live in? Please remind me never to move there. Many states have relaxed certification requirements for teachers in charter schools, meaning that they allow individuals without teaching licenses to teach in charter schools. However, I believe in most of those states (I would have said all before reading your post), those individuals are still required to have a bachelor's degree.



Utah. I know several charter school teachers without bachelor's degrees and not just in the state of Utah. They do not teach what are considered "core" classes. It is quite disheartening because, as I said, I have worked with some charter schools which are absolutely amazing (and I am not saying the one he teaches at isn't, I have no idea). He knows the subject he teaches (computer skills) better than I do and has some real-world experience, but my mind is blown how he even got an interview.
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Re: Frontline--The Retirement Gamble

Postby LadyGeek » Sun May 05, 2013 11:24 am

jwillis77373 wrote:I watched the show.

But thought it was not as good as the other Frontline show about the same subject matter [ Can You Afford to Retire? ] by Hedrick Smith in 2006.

The full show is available online. http://www.pbs.org/wgbh/pages/frontline/retirement/

Here's the transcript: Can You Afford To Retire? Airdate: May 16, 2006
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Re: Jack says pay 1% to own the US stock market?

Postby ruralavalon » Sun May 05, 2013 12:21 pm

arcticpineapplecorp. wrote: . . .
Also, 1% wipes out 25.8% of one's portfolio over 30 years (from http://vanguardblog.com/2011/10/28/stop ... f-returns/)

Thanks for including the link, I've always wanted a nice little table or chart showing the cummulative impact of those seemingly small fees.
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Re: Frontline--The Retirement Gamble

Postby CyberBob » Wed Jun 12, 2013 5:21 pm

Morningstar just posted a piece about the show. Apparently, they thought it a bit too much 'shock' journalism and not enough facts. The Morningatar piece is To the Back of the Line, Frontline.

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Re: Frontline--The Retirement Gamble

Postby gkaplan » Wed Jun 12, 2013 5:49 pm

CyberBob wrote:Morningstar just posted a piece about the show. Apparently, they thought it a bit too much 'shock' journalism and not enough facts. The Morningatar piece is To the Back of the Line, Frontline.

Bob


Nobody loves 401(k) plans these days. Once the media's darling, 401(k)s have come under increasing scrutiny and criticism, culminating in April's widely viewed PBS "Frontline" documentary, "The Retirement Gamble," which savaged 401(k)s for their role in the country's "retirement crisis".....

"The Retirement Gamble," however, goes well past legitimate. To make its points, the show misrepresents the typical investor experience. It emphasizes the worst aspects of 401(k) investing, so that the bottom 5% or 10% of the distribution appears to be the norm. Periodically, it intersperses a frightening statistic that, upon closer examination, isn't really that scary after all. The purpose of the statistic was to scare, not to inform.

In short--and quite ironically--the show resembles a Wall Street seminar. It seeks to upset the audience through the use of dubious figures and disturbing anecdotes. It all feels quite convincing at the time, but after the fact, parsing through the statements, you realize that it was a sales presentation--and you were had.

Let's look at some of the claims....


http://news.morningstar.com/articlenet/article.aspx?id=599612#cpage=0

(Edited to provide column background.)
Last edited by gkaplan on Wed Jun 12, 2013 9:14 pm, edited 1 time in total.
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Re: Frontline--The Retirement Gamble

Postby Fallible » Wed Jun 12, 2013 5:52 pm

CyberBob wrote:Morningstar just posted a piece about the show. Apparently, they thought it a bit too much 'shock' journalism and not enough facts. The Morningatar piece is To the Back of the Line, Frontline.

Bob


I'm stuck on the author's line at the beginning of the article: "Yes, 401(k) plans are imperfect. (So, too, were Mother Teresa and sliced bread.)"

Sliced bread is imperfect?
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Re: Frontline--The Retirement Gamble

Postby Blues » Wed Jun 12, 2013 5:55 pm

Fallible wrote:I'm stuck on the author's line at the beginning of the article: "Yes, 401(k) plans are imperfect. (So, too, were Mother Teresa and sliced bread.)"

Sliced bread is imperfect?


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Re: Frontline--The Retirement Gamble

Postby IlliniDave » Wed Jun 12, 2013 6:08 pm

gkaplan wrote:
CyberBob wrote:Morningstar just posted a piece about the show. Apparently, they thought it a bit too much 'shock' journalism and not enough facts. The Morningatar piece is To the Back of the Line, Frontline.

Bob


Here's the column.

http://news.morningstar.com/articlenet/article.aspx?id=599612#cpage=0


To an extent I agree, it could have been more balanced and still effectively conveyed the message. I believe Vanguard had a blog in response as well. The thing I didn't like was the undertone at times that people are inherently incapable of making good decisions on their own and we need someone to rise up and save us from ourselves.

An aside, I encountered that Frontline show from a link on an M* forum and long story short, I wound up here. So, the BH community may have an additional grudge to hold against the piece. :mrgreen:
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Re: Frontline--The Retirement Gamble

Postby Fallible » Wed Jun 12, 2013 6:24 pm

Blues wrote:
Fallible wrote:I'm stuck on the author's line at the beginning of the article: "Yes, 401(k) plans are imperfect. (So, too, were Mother Teresa and sliced bread.)"

Sliced bread is imperfect?


Is it any Wonder?


That's what I wonder - what's imperfect? Uneven slicing? The bread itself? Can we no longer say something is the greatest thing since sliced bread?
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Re: Frontline--The Retirement Gamble

Postby schuyler74 » Wed Jun 12, 2013 6:29 pm

Fallible wrote:Can we no longer say something is the greatest thing since sliced bread?

I found this article fascinating on the history of sliced bread.
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Re: Frontline--The Retirement Gamble

Postby Blues » Wed Jun 12, 2013 6:31 pm

Fallible wrote:
Blues wrote:
Fallible wrote:I'm stuck on the author's line at the beginning of the article: "Yes, 401(k) plans are imperfect. (So, too, were Mother Teresa and sliced bread.)"

Sliced bread is imperfect?


Is it any Wonder?


That's what I wonder - what's imperfect? Uneven slicing? The bread itself? Can we no longer say something is the greatest thing since sliced bread?


Wonder no more...It's all good.

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