The entire workday was taken up with 401(k) Administrative meetings (and preparations for the meetings.)
Which presents me with a fine opportunity to post about retirement planning, and why anybody reading this had better get serious about tucking cash away for their Golden Years ...
Our outside experts attending the meetings today said the obvious:
"Very few people save enough for retirement. That's why a lot of corporate 401(k) Plans are now moving to "opt out" enrollment structures: When you're hired, you're automatically in the company 401(k) Plan at 3% or 4% unless you act to get out. Which most people don't."
I'm not a licensed financial advisor but I've done a jillion 401(k) enrollment meetings and read more financial blogs, investing books, and mutual fund web sites than I can remember. And here's the basic deal:
There is no perfect investment model. (When every asset class except cash tanks at the same time, like happened for six months in 2008-2009, what are you going to do?) Here are a few important retirement sign posts:
Age 50: Special "catch up" provisions allow you to contribute more to 401(k) Plans and IRAs.
Age 55: Early Retirement allowed by Motion Picture Industry Health and Pension Plan (49.5% of monthly annuity; 100% of Individual Account Plan with 20 Qualified Pension Years and 20,000 hours.) Special Early Retirement (70% of monthly annuity and 100% of Individual Account Plan with 30 Qualified Pension Years and 60,000 hours.)
Age 59 1/2: Can take withdrawal from 401(k)s and IRAs without penalty.
Age 60: Full retirement and Retiree Health Benefits from MPIPHP with 30 Qualified Pension Years and 60,000 hours.
Age 62: Early Social Security benefits.
Age 65: Medicare becomes available.
Age 65: Full Retiree benefits from MPIPHP.
Age 67: Full Social Security benefits for those born after 1960.
Age 70: Social Security benefits stop growing. (Grows 8% per year from age 62 to age 70 -- IF benefit is unused.)
Age 70 1/2: Minimum distribution from IRAs and 401(k) Plans are required.
Asset allocation can be as simple or complex as you care to make it. The standard-issue allocation for people under 45 is 60% stocks (70% domestic; 30% foreign, with a quarter of the total in small caps) and 40% bonds (short term and intermediate issues.)
For people over 55 the usual allocation is 60% bonds and 40% stocks. (And here you will find one of the kazillion asset allocation and investment wizards that are available on the intertubes.)
Asset allocation and a solid investment strategy are relatively simple things. What's hard is sticking with them. But with a bit of discipline, the task is highly doable.