"My Faith-Based Retirement" by Joe Nocera, NYT

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Mrs.Feeley
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"My Faith-Based Retirement" by Joe Nocera, NYT

Post by Mrs.Feeley » Fri Apr 27, 2012 11:44 pm

A great column from a great columnist at the NY Times:

"My Faith-Based Retirement" by Joe Nocera
http://www.nytimes.com/2012/04/28/opini ... nt.html?hp

Even those of us who have scrupulously "stayed the course," scrimping and investing through the decades, can't help but feel a similar sense of futility and despair at times. Nocera is right: for most people it is madness to link investment with retirement. Even for smart people it often is. One good crisis and you're floating away on your own pitiful iceberg.

Anyhow, read it and see what you think.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by letsgobobby » Sat Apr 28, 2012 1:01 am

It is indisputable that most people cannot be great investors. It turns out that's good for those of us who are, but nevertheless, we're going to need to fix this problem. I hope we don't fix it at my expense, but I bet we will.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by 555 » Sat Apr 28, 2012 1:22 am

The column is awful, as are most of the comments.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by yobria » Sat Apr 28, 2012 1:34 am

Thanks, interesting article. Performance chasing, portfolio concentration, messy divorce, 401k borrowing...yep, that's certainly how not to do it. But (some) people are learning - I know plenty that are socking away money in their 401ks, year after year, owning diversified, low fee funds. Note the rise in Vanguard's asset base, and the rush by its competitors to offer low fee funds.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by John2525 » Sat Apr 28, 2012 1:43 am

I get the impression that a lot of people in this country don't enjoy reading and educating them selfs and would rather come home and watch reality tv than pick up a book and learn about investing or learn about anything for that matter. The problem is not even that bad because a lot of the baby boomers will have some form of pension and full SS. Just wait for generation X and Y who will likely have reduced SS if any and no pensions or savings, that's when things will really get bad. I don't feel sorry for anybody who chooses not to educate them selfs on something as important as retirement and spends every last dime they make on crap they don't need, and think the worst thing in the world would be to die with money in the bank. We all have to make decisions in life and take responsibility for them. The author and most of the people in the comments don't seem to like this. If someone chooses to spend all their time watching " keeping up with the kardashins" and spending above their means so be it, but don't whine when you have to work till the day you die.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by MossySF » Sat Apr 28, 2012 2:02 am

Bogleheads are in the 15% minority. To rail against the 85% majority for making poor financial decisions is silly. It's evolutionary biology -- 500M years have conditioned animals -- and we most assuredly are animals -- to consume as much as possible today because there will be a famine tomorrow and you need those fat cells to keep you alive. That kind of behavior doesn't work so well in a man-made financial world and it takes active willpower to continually fight against it. If everybody could just turn on and flip the switch in their brain to be smart financial, I guarantee you the 15% Boglehead minority would not be doing as well. In other words, our investments are profiting off the hyper-consumerism of the majority.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by John2525 » Sat Apr 28, 2012 3:10 am

MossySF wrote:Bogleheads are in the 15% minority. To rail against the 85% majority for making poor financial decisions is silly. It's evolutionary biology -- 500M years have conditioned animals -- and we most assuredly are animals -- to consume as much as possible today because there will be a famine tomorrow and you need those fat cells to keep you alive. That kind of behavior doesn't work so well in a man-made financial world and it takes active willpower to continually fight against it. If everybody could just turn on and flip the switch in their brain to be smart financial, I guarantee you the 15% Boglehead minority would not be doing as well. In other words, our investments are profiting off the hyper-consumerism of the majority.


I agree with what you are saying but I still don't feel much sympathy for people who make bad choices in life and then don't want to deal with the consequencies. It is pretty similar to people who eat fast food 3 times a day, are morbidly obese and yet think that it is just in their genes to be fat. Don't feel much sympathy for those people either.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by VictoriaF » Sat Apr 28, 2012 3:50 am

The article is OK. It is not clear who are the intended readers. "Prudent investors" who have avoided the traps Nocera fell in, proclaim the lack of sympathy (exemplified by some earlier comments in this thread). "Miserable elderly" with meager income and assets cannot do much about it. "Wealth builders" in the middle of their careers are likely to dismiss Nocera's experience either because they are sophisticated and (think they) understand saving and investing, or because they are unsophisticated and don't understand the implications of the article.

Considering Nocera's story in isolation, I have identified two clear mistakes, one past and one present. While I can understand him getting caught in the technology bubble and getting divorced, I see no logic in buying and renovating a house after the housing bubble has burst(*).
Joe Nocera wrote:The bull market ended with the bursting of that bubble in 2000. My tech-laden portfolio was cut in half. A half-dozen years later, I got divorced, cutting my 401(k) in half again. A few years after that, I bought a house that needed some costly renovations.

(*) Year 2000 plus 6 years ("half-dozen") plus 3 years ("a few") puts his house purchase into 2009. I consider this an inexcusable past mistake.

The present mistake is expressed in this statement:
Joe Nocera wrote:I do work that I love, which requires no heavy lifting and has no mandatory retirement age. If I become incapacitated, I will have assisted-living insurance. Otherwise, I can keep writing till I drop.


The Internet is rapidly displacing the printed press, and free information is rapidly displacing paid journalism. Even if good journalists form a long tail into the future, there will be ever fewer of them, and their compensation will be ever worse.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by NAVigator » Sat Apr 28, 2012 4:34 am

It is interesting to observe the human instinct to constantly compare ourselves to others. In reading accounts of people who suffer big losses we can scoff at their poor choices. However, WE have a choice to make as well. We can ridicule others for their lack of financial education and feel comfortable and even smug in our wisdom. Alternatively, we can feel gratitude for whatever brought us to the understanding of how to live and invest wisely.

I choose gratitude.

I did not invent or even study how investing in broad diversified funds and staying the course is superior to stock picking and market timing. I came upon this knowledge, after several failing attempts. I found the Bogleheads forum because others decided not to keep the information to themselves. They started this forum to share "investing advice inspired by Jack Bogle". Mr. Bogle based a company on the belief that he could provide individual with a fair shake in the investing arena.

I cannot take any pride in investing success. Instead I am grateful I have learned from others that were willing to share. This success doesn't spread through contentment and lack of pity for the unfortunate. Rather by enlightening others that will listen, the message spreads. So, I am grateful for Jack Bogle, the Bogleheads forum, the authors of the Bogleheads books, and the many who contribute ideas here.

We have a choice. We can be smug and uncaring in "our" wisdom or we can be filled with gratitude for others willing to share sound investing practices with us.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by SGM » Sat Apr 28, 2012 5:04 am

I don't understand taking money out of a 401k for a non-emergency expense. I also don't understand the logic of lump sum withdrawals for whatever reason when the market or your investments are down. At what age can you withdraw a lump sum from your 401k without a tax penalty? The author made some disastrous choices here.
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Mrs.Feeley » Sat Apr 28, 2012 5:12 am

SGM wrote:I don't understand taking money out of a 401k for a non-emergency expense. I also don't understand the logic of lump sum withdrawals for whatever reason when the market or your investments are down. At what age can you withdraw a lump sum from your 401k without a tax penalty? The author made some disastrous choices here.


He never explains why he did that. Maybe he thought that with his 401 decimated he would rennovate the property and flip it, earning a million or more in the super-charged NY city real estate market and thereby fund his retirement? Or maybe it was momentary insanity. I've known people in the grief and despair of divorce who've done rash and foolhearty things.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by MossySF » Sat Apr 28, 2012 5:29 am

John2525 wrote:I agree with what you are saying but I still don't feel much sympathy...


Nobody is asking for sympathy -- not that sympathy is worth much anyways. We just should avoid the dog-piling and back-patting. NAVigator's post is more in line with the tone we should be taking.

SGM wrote:I don't understand taking money out of a 401k for a non-emergency expense. I also don't understand the logic of lump sum withdrawals for whatever reason when the market or your investments are down. At what age can you withdraw a lump sum from your 401k without a tax penalty? The author made some disastrous choices here.


Well taxes & penalties are lower when the balance is lower. So if your portfolio is dropping and seems like it'll never go up again (see the mood of this forum in March 2009), I can see people taking their money out because the tax/penalty is minor.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Bob's not my name » Sat Apr 28, 2012 5:49 am

Mrs.Feeley wrote:foolhearty
Not a word, but maybe it should be -- it's pretty good.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by John2525 » Sat Apr 28, 2012 6:24 am

MossySF wrote:Nobody is asking for sympathy -- not that sympathy is worth much anyways. We just should avoid the dog-piling and back-patting. NAVigator's post is more in line with the tone we should be taking.


The article was written in a way to make you try to feel sympathy for the guy in a "poor me, I didn't know any better" format. Ignorance is not an excuse you can use for not following the law and ignorance is not an excuse for poor retirement planning.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Taylor Larimore » Sat Apr 28, 2012 6:36 am

MrsFeeley:

Thank you for the article.

Best wishes.
Taylor
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by sscritic » Sat Apr 28, 2012 6:43 am

John2525 wrote:The article was written in a way to make you try to feel sympathy for the guy in a "poor me, I didn't know any better" format. Ignorance is not an excuse you can use for not following the law and ignorance is not an excuse for poor retirement planning.

I read it differently. I focused on how hard it is to be disciplined. How many here got out of the market during 2008-2009? Why did we need Adrian to tell us to limit our exposure to stocks? Did anyone stress limiting exposure to stocks in 2006 and 2007?
But even putting income shocks aside, she said, most human beings lack the skill and emotional wherewithal to be good investors. Linking investing and retirement has turned out to be a recipe for disaster.

Read a few more threads on bogleheads, and you will get a sense that there are a lot of Joe Nocera's who are friends and relatives of posters if not the posters themselves.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by RadAudit » Sat Apr 28, 2012 7:14 am

May be the columnist's attention was drawn to the plight of the soon-to-be retired by the current flap over the defined benefit pension program at the NYT. Whatever the cause it raised some interesting comments from some folks who had some strongly held opinions about what is wrong with retirement and American business.

As I read the comments I was reminded of that lovely scene in the 1980's version of "A Christmas Carol" where Christmas Present warns Scrooge (George C. Scott) to beware of the twins - Ignorance and Want. (If I recall their names correctly.) Based on the comments to the article, there seems to be few more of them now than then and they read the NYT.

And yes, I am in sorry for the condition they are in - however they got there. It's tough to be young and broke. It's also tough to be old and broke. And the warning is as valid today as it was then. It is just difficult for me to figure out an investment strategy that takes in to consideration that folks with these opinions seem to get to vote concerning how to resolve this personal financial mess.

I guess stay the course will work. I'm out of answers. May be the answer is Faith Based Retirement. Only not the way the columnist suggests. More along the lines of helping your neighbors and repairing / maintaining family relationships.
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by hicabob » Sat Apr 28, 2012 7:16 am

The Joe's of the world are why we should keep Social Securty/Medicare around for a few more centuries

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by renditt » Sat Apr 28, 2012 7:44 am

I think it's pretty simple: To expect the average person to manage his / her retirement portfolio responsibly is simply not going to work. The thought of my parents (who live in Europe and both have pensions) managing their own retirement money would scare me to death. I haven't really thought this through but in my view 401k should be changed that
- saving is more mandatory
- investing more conservative
- it should be impossible to take money out before retirement

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by ResNullius » Sat Apr 28, 2012 7:53 am

I decided to delete this.
Last edited by ResNullius on Sat Apr 28, 2012 8:35 am, edited 1 time in total.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Bob's not my name » Sat Apr 28, 2012 7:56 am

renditt wrote:- saving is more mandatory
- investing more conservative
- it should be impossible to take money out before retirement
There are some good studies on these factors. I believe several have concluded that people will contribute more if there are options for borrowing or withdrawing before retirement -- certainly on bogleheads we very frequently use the emergency withdrawal options to encourage folks to contribute to Roth and traditional IRAs, and the argument is usually persuasive. You have to look at the net effect of such factors across a wide data set, not just at negative anecdotes.

I don't see much difference between a 401k and a house -- everyone used to champion the personal residence as the perfect, can't lose, all-American retirement savings vehicle. They argued that
- it makes saving mandatory
- it is conservative
- it is possible but not simple nor wise to take money out before retirement

And yet until recently -- and even now, really -- we don't hear often that "To expect the average person to manage his / her homeownership responsibly is simply not going to work."

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by NorCalDad » Sat Apr 28, 2012 8:12 am

I liked this column because I think it's a good wake-up call that people need to save and plan wisely.

I think colleges and high schools should have a mandatory personal finance graduation requirement. This would be more valuable to students than a great deal of other requirements they must meet. I remember being in school not really caring about credit card or student loan debt. I figured, well, I'll be making money when I get out, so what does it matter? Many young graduates head into the world with a pent-up desire to spend and a real paycheck for the first time in their lives. Those of us here figured things out quickly, but judging by the spending I see even by middle-aged Americans, many others think it is appropriate to live paycheck to paycheck or worse because they need instant gratification.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by trico » Sat Apr 28, 2012 8:26 am

I think us humans are to much like optomists. I just check most of my managed mutual funds lately and the stocks that have moved up the most, are Phillip Morris Company and Altria Group. My parents all passed away from smokeing and their excuse for no quiting was that it was to late for them, but that I should quit. We are creatures of bad habits not only in investing, but in health care and autos and pesticides, all the things that kill us. So here I am at 59 and retired and I went to my doctor to make sure everything is working ok, and said most retired folks die shortly after retirement. So I asked then should start smoking?, since I am going to die shortly. This is kind of how human being think thru things. If you were told you had 3 months to live, what would you do with your retirement money?

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by VictoriaF » Sat Apr 28, 2012 8:30 am

NorCalDad wrote:I think colleges and high schools should have a mandatory personal finance graduation requirement. This would be more valuable to students than a great deal of other requirements they must meet. I remember being in school not really caring about credit card or student loan debt. I figured, well, I'll be making money when I get out, so what does it matter?


If personal finance became a school requirement, the instructors would have to be certified financial professionals. Many financial advisers do more harm than good, as exemplified by numerous messages in this Forum.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by dalerobk » Sat Apr 28, 2012 8:31 am

hicabob wrote:The Joe's of the world are why we should keep Social Securty/Medicare around for a few more centuries


YES. And not allow people to invest their social security funds (as Bush wanted to do). The vast majority of Americans count on ss. Imagine how horrible things would be if they were allowed to invest it and the same amount in ss as they had in their 401k.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by NorCalDad » Sat Apr 28, 2012 8:37 am

Victoria, fair point. I'm not saying it has to be a capital letter Personal Finance requirement. Not getting into asset allocation or sectors of the market. I'm talking about things like telling kids why they should open a 401k that has an employer match, the benefit of compound interest, how credit card debt can impair their finances. What is an IRA? What is a Roth IRA? I think young adults could benefit by this.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by VictoriaF » Sat Apr 28, 2012 8:38 am

dalerobk wrote:Imagine how horrible things would be if they were allowed to invest it and the same amount in ss as they had in their 401k.


In the TSP discussion forums many people were angry when the TSP Board has instituted controls on frequent trading. Whether it is a fundamental human psychology or the influence of the financial industry or, most likely, the interplay of both -- investors can easily slip into gambling behaviors. Social Security is the safety net for self-inflicted financial harm.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Toons » Sat Apr 28, 2012 8:39 am

The article is somewhat depressing (Woe is Me). What were all these people who have very little saved for retirement doing with the money they were making for decades??? :oops:
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by VictoriaF » Sat Apr 28, 2012 8:45 am

NorCalDad wrote:Victoria, fair point. I'm not saying it has to be a capital letter Personal Finance requirement. Not getting into asset allocation or sectors of the market. I'm talking about things like telling kids why they should open a 401k that has an employer match, the benefit of compound interest, how credit card debt can impair their finances. What is an IRA? What is a Roth IRA? I think young adults could benefit by this.


I agree that young adults (and mature adults) could benefit from financial literacy. But I am pessimistic about a practical realization of it. For example, if one decides to educate himself about personal finance and walks into a bookstore, he is more likely to pick a book that will put him on a wrong financial track. Can role models help? Many Bogleheads discussions are about family members who make disastrous financial mistakes despite having a resident Boglehead.

I wish a workable solution were found.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by bengal22 » Sat Apr 28, 2012 8:54 am

Yes it was a good essay that should make us all stop and think. But of course we need to invest for our retirement - that is a silly comment that we should not link investment and retirement. But we should not spectulae with our future and load up on one sector(high-tech for instance).

2 Thoughts:

1. I was a little scared when it was suggested that we need to "fix" the 401K issue. Typically, government "fixing" means more bailouts - either corporations, or people that bought more house than they should have, yada, yada, yada.

2. With the title of the article I thought perhaps we were going to get the wise way to plan for our future. But with it being the NYT I should have know better.

Have a Blessed Day

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by matjen » Sat Apr 28, 2012 9:00 am

dalerobk wrote:YES. And not allow people to invest their social security funds (as Bush wanted to do). The vast majority of Americans count on ss. Imagine how horrible things would be if they were allowed to invest it and the same amount in ss as they had in their 401k.


I have forgotten all the details but as I recall the forced savings options were quite conservative and at 47 you are forced into a Lifecycle/Strategy vehicle. It's not like people would be 100% in emerging markets.

RadAudit hit the nail on the head. This is Nocera's transparent swipe at NYT management's attempt to reduce the employee defined benefit plan in order to shore up the company's finances. Schadenfreude given the paper's editorial posture over States trying to do the same thing.
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by yobria » Sat Apr 28, 2012 9:05 am

VictoriaF wrote:
NorCalDad wrote:Victoria, fair point. I'm not saying it has to be a capital letter Personal Finance requirement. Not getting into asset allocation or sectors of the market. I'm talking about things like telling kids why they should open a 401k that has an employer match, the benefit of compound interest, how credit card debt can impair their finances. What is an IRA? What is a Roth IRA? I think young adults could benefit by this.


I agree that young adults (and mature adults) could benefit from financial literacy. But I am pessimistic about a practical realization of it. For example, if one decides to educate himself about personal finance and walks into a bookstore, he is more likely to pick a book that will put him on a wrong financial track. Can role models help? Many Bogleheads discussions are about family members who make disastrous financial mistakes despite having a resident Boglehead.


I think there are only two options: education, and having the government take care of retirement planning for the masses. There's almost none of the former, and the latter (SS, Medicare, Medicaid) are on shaky financial ground.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Leesbro63 » Sat Apr 28, 2012 9:10 am

VictoriaF wrote:In the TSP discussion forums many people were angry when the TSP Board has instituted controls on frequent trading. Whether it is a fundamental human psychology or the influence of the financial industry or, most likely, the interplay of both -- investors can easily slip into gambling behaviors. Social Security is the safety net for self-inflicted financial harm.

Victoria


I've come to the same conclusion, even though I started on the opposite side. I suspect as those who still have the old-style defined benefit pensions die off, and we move more and more to self-directed retirement plans, that this issue is going to become bigger.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Leesbro63 » Sat Apr 28, 2012 9:11 am

yobria wrote:
VictoriaF wrote:
NorCalDad wrote:Victoria, fair point. I'm not saying it has to be a capital letter Personal Finance requirement. Not getting into asset allocation or sectors of the market. I'm talking about things like telling kids why they should open a 401k that has an employer match, the benefit of compound interest, how credit card debt can impair their finances. What is an IRA? What is a Roth IRA? I think young adults could benefit by this.


I agree that young adults (and mature adults) could benefit from financial literacy. But I am pessimistic about a practical realization of it. For example, if one decides to educate himself about personal finance and walks into a bookstore, he is more likely to pick a book that will put him on a wrong financial track. Can role models help? Many Bogleheads discussions are about family members who make disastrous financial mistakes despite having a resident Boglehead.


I think there are only two options: education, and having the government take care of retirement planning for the masses. There's almost none of the former, and the latter (SS, Medicare, Medicaid) are on shaky financial ground.


Actually from what I read, SS can be fixed fairly easily. The other two, not so much. But I think that the current state where most people have little more than SS at 65 is going to continue.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by matthewm » Sat Apr 28, 2012 9:18 am

NorCalDad wrote:Victoria, fair point. I'm not saying it has to be a capital letter Personal Finance requirement. Not getting into asset allocation or sectors of the market. I'm talking about things like telling kids why they should open a 401k that has an employer match, the benefit of compound interest, how credit card debt can impair their finances. What is an IRA? What is a Roth IRA? I think young adults could benefit by this.


THIS +1. Throw it in there along with "sex ed, drivers ed, home ec", can't hurt. I wish I had someone teach me this when I was younger, my parents never really discussed financial stuff with me. I feel very fortunate to have found this forum and the recommended reading list while still relatively young. Thank you all for your time and contributions.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by livesoft » Sat Apr 28, 2012 9:21 am

Mr Nocera is really not in a bad position at all. He has a job that he loves that can take him to death without retirement. He probably believed all along that he didn't need to save for retirement and acted accordingly. His role models are probably other elderly journalists that work until they die. They are household names. Perhaps a feel-good "why I don't save a dime and spend everything I earn" article is in order. :)
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Toons
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Toons » Sat Apr 28, 2012 9:35 am

livesoft wrote: Perhaps a feel-good "why I don't save a dime and spend everything I earn" article is in order. :)


+1 :happy
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by SteveB3005 » Sat Apr 28, 2012 9:49 am

.....having the government take care of retirement planning for the masses.


THIS is the only viable long term solution that will protect those who do save on their own and provide for those who do not.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by 555 » Sat Apr 28, 2012 9:55 am

matjen wrote:`RadAudit hit the nail on the head. This is Nocera's transparent swipe at NYT management's attempt to reduce the employee defined benefit plan in order to shore up the company's finances. Schadenfreude given the paper's editorial posture over States trying to do the same thing.'

Defined Benefit plans are the real disaster. They promise payouts that could never be realized from the contributions, so they leech off of other sources to make up the shortfall. Where I work, the employer has to come up with an amount equalling 20% of the salary of all the Defined Contribution plan participants, and hand that money over to the Defined Benefit plan. This means less pay and less jobs for most of us to feed the privileged fat cats with pensions. It has to stop.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Leesbro63 » Sat Apr 28, 2012 9:55 am

livesoft wrote:Mr Nocera is really not in a bad position at all. He has a job that he loves that can take him to death without retirement. He probably believed all along that he didn't need to save for retirement and acted accordingly. His role models are probably other elderly journalists that work until they die. They are household names. Perhaps a feel-good "why I don't save a dime and spend everything I earn" article is in order. :)


But as posted here earlier, that's not really true. Journalists are a dime-a-dozen, and WELL PAID journalists are becoming dinosaurs because of this and because the internet has made written content essentially free. If I were Nocera, I'd be VERY worried about long term job security.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by letsgobobby » Sat Apr 28, 2012 10:02 am

the data on financial education is discouraging. Teaching junior high students financial issues does not lead to measurably different outcomes down the road. Think of Mr. Nocera, with all his financial education and his mistakes: how could a single class meaningfully change the trajectory for most average folks?

Depressed patients are much more realistic about their abilities than non-depressed controls. This is well-known. The argument is that the very condition of human existence requires pathological optimism; a realist would see that we are nothing but dust with a 70 year lifespan in a 15 billion year old universe - so what's the point of anything? By virtue of this pathological optimism, we choose to live - meaning delayed gratification is not in our genes.

I am of the camp that the vast majority will never be able to manage their best 90 year financial plan. To prevent financial and social catastrophe, some externally imposed plan (a la social security) is required. The minority that can handle this kind of work should willingly pay into the system to protect the social status quo and their security. It's a small price to pay.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Leesbro63 » Sat Apr 28, 2012 10:06 am

Letsgobobby: That is a GREAT post. Great observation. I guess our ability to delay death has improved faster than our ability to fund continuing life.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by hicabob » Sat Apr 28, 2012 10:17 am

letsgobobby wrote:Depressed patients are much more realistic about their abilities than non-depressed controls. This is well-known. The argument is that the very condition of human existence requires pathological optimism; a realist would see that we are nothing but dust with a 70 year lifespan in a 15 billion year old universe - so what's the point of anything? By virtue of this pathological optimism, we choose to live - meaning delayed gratification is not in our genes.




Most interesting about depressed patients - although a tad depressing! :(

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Bob's not my name » Sat Apr 28, 2012 10:38 am

SteveB3005 wrote:
.....having the government take care of retirement planning for the masses.
THIS is the only viable long term solution that will protect those who do save on their own and provide for those who do not.
Yes. Also, the government should decide who can afford a house, and what size. Students should not be allowed to choose their universities, nor even whether they should go to university. Passenger vehicles (and thus car loans and leases) should be abolished and replaced with buses and other modes of public transportation. While we're at it, I'm really sick of people having their own favorite color. The government should decide what the best color is, and Ralph Lauren should just make shirts in that damn color.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by ruralavalon » Sat Apr 28, 2012 10:47 am

jenny345 wrote:I think it is kind of weird for the New York Times to have yet another business / financial columnist who can't manage his own finances.
Indeed, how ironic.
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Leesbro63 » Sat Apr 28, 2012 10:49 am

I am not a moderator, but I've been around (and "WARNED") enough to know this is getting political. :? Let's return from the less political "big picture" part of this post to the more specific "what can Nocera do to improve his comfortable retirement odds?" thpe conversation.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by Fallible » Sat Apr 28, 2012 11:02 am

I thought the column led up beautifully to the right way to invest (basically low-cost indexing, diversifying, staying the course) and then it didn't go there. Instead, after detailing his investing mistakes, Nocera rightly interviews behavioral economist Teresa Ghilarducci, who accurately describes the plight of too many individual investors, but then ends with an unsatisfying reference to "faith-based" retirement planning. And Nocera picks up on it and basically ends the column with it. Ends nowhere. IMO, these investors referred to should be advised of the right way to invest (which does not necessarily have to include the stock market) or choose a good advisor to help them. Overall, the column is right on about the wrong ways to invest and plan for retirement, but it missed a great opportunity to then explain the right ways.
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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by robocop » Sat Apr 28, 2012 11:15 am

Good idea, Leesbro.

If I were Nocera, I would 1) downsize my lifestyle as much as I could, 2) seek as many extra employment opportunities (dogsitting, writing a blog, etc.) as I could to earn extra while I was still healthy, and 3) plan to move to a very low cost, retirement-friendly state when I retire.

I think the article is good to read because it shows the common mistakes people make. We shouldn't bet too much on one sector, we shouldn't pull money out before retirement because of the penalties, and we should stay the course even when the markets are down. These are all very common mistakes. Other things, such as health issues and divorce, are also common but more difficult (and sometimes impossible) to prevent. My strategy to deal with those risks is to save as much as possible so that even if one or both of those happen to me, I will still have enough to be ok.

Thanks for sharing Mrs. Feeley!

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by yukonjack » Sat Apr 28, 2012 11:19 am

The main point of the article seems to be that for a majority of folks working past the standard retirement age is becoming the norm. Although like an earlier post mentioned this can have its own set of problems. I am just thankful to have access to this forum.

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Re: "My Faith-Based Retirement" by Joe Nocera, NYT

Post by VictoriaF » Sat Apr 28, 2012 11:52 am

Fallible wrote:Nocera rightly interviews behavioral economist Teresa Ghilarducci, who accurately describes the plight of too many individual investors...


Hi Fallible,

I agree that behavioral economists have explanations for irrationalities in our financial decisions. But even the greatest of them, Daniel Kahneman, admits that understanding the pitfalls does not protect him from falling into them (unless System-2 manages to take it over).

Victoria
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