This blog is dedicated to cutting through all the noise out there and looking at current news through a long-term disciplined lens. With that being said, there are actually a lot of good resources that preach many of the same things I’m attempting to. With that in mind, every once in a while I will provide some links that either say what I want to say (and often say it better than I could) or are just quick hits that introduce you to other writers and resources that you may want to explore further.
- First up, a review of the PBS Frontline documentary “Retirement Gamble” from a few weeks back. I haven’t had a chance to watch the entire documentary yet, but the author here makes some valid points. The 401k world is an expensive world unfortunately—the largest companies can get fees relatively low, but smaller plans (less than $20 million in assets) will struggle to do so simply due to scale. Even the best plans that have several index fund options can still see administrative costs eat away at returns. With that said, 401k’s still have wonderful benefits such as constant savings and employer contributions on your behalf. If you do your research and diversify through the best (read: lowest cost) funds available, you can still do very well. Hopefully more attention like this will continue to force companies to improve their retirement plans.
- Here’s some simple advice. Consolidate, use index funds, and have a savings plan. The last segment about all-in-one funds is true regarding simplification, but just remember to apply the same principles as you would to any mutual fund: keep it passive and low-cost.
- I thought this was an interesting discussion. This speaks to a point I’ve made here before regarding short-term noise. Kitces shows (and I know from running so many cash flow scenarios with clients) that short-term dips hardly affect a long-term plan assuming there isn’t an emotional reaction that causes a change of course. There is, however, always the risk of lower than expected long-term returns—what I’ve taken to calling “generational risk”. The way to mitigate this risk is to return to what we can control: savings, spending, and retirement date. The more willing you are to adjust these variables, the less long-term damage a prolonged market slump can cause. For many of you reading this, the variable you can adjust now is your savings.
- Lastly, I thought this was terrific. Nothing else to add on my end.
Several of you readers have sent me questions or comments building off these posts and I continue to encourage that. The discussions resulting from that have been very fulfilling, at least on my end. Always feel free to e-mail me with any follow-ups at email@example.com.