If you haven’t yet felt the sting of the current economy, I have a really good example to demonstrate how bad things have gotten. I’ve been contributing to the government retirement fund, the Thrift-Savings plan, for about 18 years now. You can choose how the money is invested, either safe but low-interest government bonds or risky but potentially high-yielding stock funds. Long term, the stock fund will pay out much more, so that’s where most of my money goes.
Since the economy tanked a couple of months ago, the value of my fund has dropped, gulp, $50,000. Were I retiring tomorrow, I’d be $50k poorer. I can’t transfer the money into the bonds fund, or I’ll miss the potential huge gains of a market recovery. The “good news” is that I’m not retiring any time soon so I’ll be around when the fund eventually recovers.
At the moment, since I can’t actually get the money, the retirement fund seems rather ethereal, but, man, the loss of $50,000 is not something you ever want to see.
2 comments:
My 401k has taken a similar hit. If I were retiring in the next couple of years, instead of 20 years from now, I’d be in real trouble.
I won't depress you all by commenting.
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