Saving More and Having Less for Retirement

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My concern is that I won't die before the lowering return and the rocket price increases siphon everything away. "It always returns cycle" may be so long I have nothing left. I had a comfortable plan in 2000 when I retired. But the rules keep changing after a peson no longer has a means to respond.

Over 70 of TX 3:51PM August 15, 2008

It's not unusual, in a down market, for your 401(k) balance to go down despite your contributions. However, in down markets you are purchasing investments at a lower cost so that when things do improve you will see greater increases than you would have had you stopped saving and stayed out of the market entirely. That said, now would be a good time to look at your investments, especially those managed by mutual fund companies that charge high fees. If you compare the performance of such investments with low fee index funds, you'll find that actively managed mutual funds aren't worth the fees they charge. Very few have been able to do better than a chicken pecking at the business section of the newspaper.
If you are retired, or near retirement, today's market is a good test of nerves which will hold you in good stead for the future. There will be other down markets during your retirement, just as there will be up markets. The key is to make sure your retirement lifestyle allows to weather the storms. When times are good, you will be tempted to increase your spending. Resist the temptation so that when the down markets come (and they will surely come from time to time) you can make it through, relatively unscathed.
Jonathan Edelfelt
Author of Who Said You Need Millions
www.WhoSaidYouNeedMillions.com

Jonathan Edelfelt of TX 9:09PM August 14, 2008

There have been (and will again be) six-month market periods to look back on where 401(k) balances did not go down. Keep saving.
That said, we all know that many (even most) defined-benefit pension plans have flown (or will soon fly) "away" into the big sky of "used-to-be."
The single exception to this is Social Security, a plan that miraculously does not have either fees to money managers or to insurance companies selling you an "annuity" to convert your savings to a guaranteed monthly income. Republicans are trying to kill this plan. Bush tried. McCain WILL try again.
Do not be a fool. Your Social Security is as "secure" as you make it by keeping Washington full of Democrats. Obama 08

of 1:56PM August 14, 2008