Anybody Buying Yet? Where’s the Bottom?

[Nick87]

I had good advice from parents about saving at a young age but didn’t take it unfortunately.

Wasted my 20’s not saving while raising a young family. Spent 8 years helping a guy build a company, didn’t contribute to any retirement the whole time. I had minimum rollover 401k from prior jobs. Finally realized about 2.5 years ago I was wasting time and left that job/company.

Now I’m sitting at 39 years old with only $50K retirement specific saving for both my wife and I. Playing catch up from wasted time unfortunately.

I saved quite a bit but that was as far as it got. I tooker a bigger beating on inflation on a savings account from 2020 to current from inflation than i think I could have ever taken investing it. Lesson learned.

 

[Nick87]

This thread shows how important Social Security is to our society.

There is and always will be a percentage of people who reach old age and do not have anything to show for their lifetime of labor.

Maybe, but more importantly how much we are in need of people to learn the importance of saving/investing. Imo.

 

[homers]

Social Security, as a retirement account, is a horrible rate of return. If one could opt out and be forced to contribute the equal amount as well as the company contribution to SS into an individual retirement account invest in the S&P, one would retire with a massive amount compared to SS. And your heirs would inherit the left over. That assumes one works at a reasonable salary for about 40-45 years. ~12.4% of annual earnings, average annual return of the S&P x 40-45 years. Of course,SS isn’t just for retirement and it was never meant to be the sole source of income during retirement.

 

[brymoore]

How Warren runs Berkshire Hathaway and his advice for his estate after his death are different. The estate has been instructed to invest 90% S&P 500 index and 10% short term government bonds for his wife. No cash mentioned.

 

[Rainer]

Buffett's estate is going into a charitable trust that will be run by his kids after he dies

 

[Big Sky Guy]

I tooker a bigger beating on inflation on a savings account from 2020 to current from inflation than i think I could have ever taken investing it. Lesson learned.

Hindsight is 20/20. Had things turned out differently and we entered a recession or depression and inflation wasn't what it was you would have felt differently.

I still think it will all come crashing down someday, but no one can build retirement accounts with that mentality and sitting on the sidelines.

Social Security, as a retirement account, is a horrible rate of return. If one could opt out and be forced to contribute the equal amount as well as the company contribution to SS into an individual retirement account invest in the S&P, one would retire with a massive amount compared to SS. And your heirs would inherit the left over. That assumes one works at a reasonable salary for about 40-45 years. ~12.4% of annual earnings, average annual return of the S&P x 40-45 years. Of course,SS isn’t just for retirement and it was never meant to be the sole source of income during retirement.

I've never understood why the SS funds aren’t just invested in the S&P, similar to a target date retirement account or something.

Also if someone would just do a few insider trades with the SS account they would become a national hero and real-life Robinhood overnight. It’s nearly universally accepted they are all doing it for personal gain, why can they not do it for the betterment of their constituents?

 

[Big Sky Guy]

I promise all of you that you were far more responsible about building a retirement than most. The median retiree is retiring with $410,000 saved. Do the math. It is pretty clear that person isn't retired at all. Maybe 100% stocks on a hope and a prayer (and a lot of ramen noodles) is the median person's retirement strategy.

My mom retired on significantly less than that, with a mortgage, before the max age for SS. Not luxurious by any means and works a couple half days a week as a cashier but overall she is doing ok.

Definitely would not advise that, but also probably closer to what is common and how important SS is for the elderly, even if I and we fundamentally disagree on its existence and management.

 

[Nick87]

My mom retired on significantly less than that, with a mortgage, before the max age for SS. Not luxurious by any means and works a couple half days a week as a cashier but overall she is doing ok.

My MIL lives on $1500 a month from ss. She has no car and owns nothing. Don't ask me how because I don't ask either. In a very expensive state to boot.

 

[Nick87]

Hindsight is 20/20. Had things turned out differently and we entered a recession or depression and inflation wasn't what it was you would have felt differently.

True but we didn't and I don't.

 

[SAJ-99]

I've never understood why the SS funds aren’t just invested in the S&P, similar to a target date retirement account or something.

Also if someone would just do a few insider trades with the SS account they would become a national hero and real-life Robinhood overnight. It’s nearly universally accepted they are all doing it for personal gain, why can they not do it for the betterment of their constituents?

The general argument against the idea under Bush was you could have a recession and at the same time the value of the holdings in the trust fund would fall. It is a good argument. The idea resurfaces because a lot of people don’t even believe in recessions anymore.

There are $2.7t in social security trust fund. Hard to make any trade of size without everyone seeing you move the price. Another reason it’s not in the S&P.

 

[SAJ-99]

Seems like smart move is to just buy stocks that the US government buys stake in as they are picking the winners for us, no? I haven't done such but seems to have worked out well for Intel and Trilogy. Now I know, they probably won't do that again, but if they do buy stake in a nuclear tech company I think I'd have a hard time not biting.

Two days ago they put out a list of things Trump Co bought. 3,700 trades in Q1. Almost no one cares. We are all desensitized to the grift.

Trump ethics filing reveals thousands of trades tied to U.S. stocks

The purchases included securities linked to Microsoft, Meta Platforms, Oracle, Broadcom, Bank of America and Goldman Sachs.

www.nbcnews.com

https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/405E4EC4E27BE8D185258DF7002DD1C0/$FILE/Trump%2C%20Donald%20J.-05.08.2026-278T(2).pdf

 

[Big Sky Guy]

The general argument against the idea under Bush was you could have a recession and at the same time the value of the holdings in the trust fund would fall. It is a good argument. The idea resurfaces because a lot of people don’t even believe in recessions anymore.

There are $2.7t in social security trust fund. Hard to make any trade of size without everyone seeing you move the price. Another reason it’s not in the S&P.

I understand, valid points. I was thinking more along the lines of accounts for individuals or age demographics so as folks approach SS age their accounts get diversified accordingly like target date funds supposedly do. Would likely still move the price but I guess I fail to understand why it’s ok for Trump and other politicians to move the price with tweets or making large insider trades (not as large as $2.7T), but if that’s done for the benefit of citizens, with citizens tax funds, it’s not ok. With as much that’s been made off polymarket could also see how this could just be done for a few years and massively grow the account.

 

[BuzzH]

I understand, valid points. I was thinking more along the lines of accounts for individuals or age demographics so as folks approach SS age their accounts get diversified accordingly like target date funds supposedly do. Would likely still move the price but I guess I fail to understand why it’s ok for Trump and other politicians to move the price with tweets or making large insider trades (not as large as $2.7T), but if that’s done for the benefit of citizens, with citizens tax funds, it’s not ok. With as much that’s been made off polymarket could also see how this could just be done for a few years and massively grow the account.

Too risky IMO, when you're gambling with the safety net SS provides.

What happens if the market or investments go to total crap?

You going to tell those that rely on SS that, "oopsie, sorry about that, now you get less"? Not to mention, that right now seems like the absolute worse time in history to try something like you propose with more and more boomers drawing SS.

I've personally been willing to take much more risk with 401's knowing that I have the safety net of SS, rental income, and also a Gov. pension. It's paid off for me in a pretty big way, but even if it didn't, I would still be in much better shape than a vast majority of Americans.

Knowing that lots of Americans would be totally hosed without SS, I would not be comfortable with gambling their futures in the market.

 

[Big Sky Guy]

Too risky IMO, when you're gambling with the safety net SS provides.

What happens if the market or investments go to total crap?

You going to tell those that rely on SS that, "oopsie, sorry about that, now you get less"? Not to mention, that right now seems like the absolute worse time in history to try something like you propose with more and more boomers drawing SS.

I've personally been willing to take much more risk with 401's knowing that I have the safety net of SS, rental income, and also a Gov. pension. It's paid off for me in a pretty big way, but even if it didn't, I would still be in much better shape than a vast majority of Americans.

Knowing that lots of Americans would be totally hosed without SS, I would not be comfortable with gambling their futures in the market.

It’s only risky from the outside like us peons play the game in our 401’s and IRA’s. Insider trading is not the same risk, IMO.

Also even without insider trading and doing it “legitimately” which is what you’re referring to it would certainly be backed by the government and “too big to fail.”

I guess my frustration comes down to being told my entire adult life to not count on SS because it’s going to go bankrupt and having the burden of risk squarely put on my generation to trust the stock market and our 401k’s and IRA’s but we cannot expect the same from the government?

 

[BuzzH]

It’s only risky from the outside like us peons play the game in our 401’s and IRA’s. Insider trading is not the same risk, IMO.

Also even without insider trading and doing it “legitimately” which is what you’re referring to it would certainly be backed by the government and “too big to fail.”

I guess my frustration comes down to being told my entire adult life to not count on SS because it’s going to go bankrupt and having the burden of risk squarely put on my generation to trust the stock market and our 401k’s and IRA’s but we cannot expect the same from the government?

I hear you.

IMO, there is no way that SS is going to fail. So many easy solutions to address it.

I'm way less pissed about SS than taking away pensions.

 

[Big Sky Guy]

I hear you.

IMO, there is no way that SS is going to fail. So many easy solutions to address it.

I'm way less pissed about SS than taking away pensions.

I’ve come around to that as well, just would like to see it managed well/better.

Same principle and frustration to me. Pensions should be managed for growth and longevity as well and it equally irritates me to see them supposedly not remaining solvent and folks getting shafted.

 

[SAJ-99]

I understand, valid points. I was thinking more along the lines of accounts for individuals or age demographics so as folks approach SS age their accounts get diversified accordingly like target date funds supposedly do. Would likely still move the price but I guess I fail to understand why it’s ok for Trump and other politicians to move the price with tweets or making large insider trades (not as large as $2.7T), but if that’s done for the benefit of citizens, with citizens tax funds, it’s not ok. With as much that’s been made off polymarket could also see how this could just be done for a few years and massively grow the account.

I understand the argument. Even agree with it to some extent. The complaint about SS only investing in US treasuries has been made for a long time. I would point out some similarities in public space, for example life insurance companies are forced to invest based on Risk-based capital exposures. While they can, they rarely hold much in equities because it eats up too much of their risk budget. The reason is the beneficiaries have to be able to rely on that money being there, so states make sure the insurance co doesn't go out of business in an economic downturn. SS is an insurance program at its core.

There have also been arguments that people should be allowed to invest the money as they see fit in their SS account. That idea I laugh at. 1) people are completely unaware of what their risk tolerance really is, and 2) the average person can't manage their own finances for sh*!. So the government does it on a schedule. Problem 1 is eventually someone figures out the schedule and starts front running trades before SS rebalances the accounts. If SS has to outsource to someone like Vanguard, the company still gets a few billion a year in fees, which many will complain about.

 

[Dave N]

I'm way less pissed about SS than taking away pensions.

Yep. Cat froze our pensions and stopped contributing when I had 22 years in. I worked another 6 years beyond that. It probably wouldn't have increased by a real significant amount but my monthly pension check is less than what I made in a week!

 

[brymoore]

I received an unsolicited email this morning saying I was a participant in a settlement for my previous employer charging too high of fees on 401ks.

Ok. I knew nothing about it. I looked into the settlement. $250,000 divided over 93,000 people. I’m going to get $2.68. I feel like we’re giving it to the man! Lawyers must have gotten some type of return for work done.

 

[Nick87]

I received an unsolicited email this morning saying I was a participant in a settlement for my previous employer charging too high of fees on 401ks.

Ok. I knew nothing about it. I looked into the settlement. $250,000 divided over 93,000 people. I’m going to get $2.68. I feel like we’re giving it to the man! Lawyers must have gotten some type of return for work done.

Buy yourself something real nice Clark.