Will we really be able to retire?
This morning I logged onto Vanguard to look at my husband's Roth IRA as well as my own, and was in for a surprise. Since October 31, my Roth account has lost $1100 in value. My husband's Roth, invested in an entirely different fund, has lost $2300 in the same four weeks! OMG! We should withdraw all the funds and put them into cash or something more secure, shouldn't we, rather than risk losing any more?
Are you kidding me?
My husband and I are 25 years old, and by law, with a couple of exceptions, cannot enjoy the fruits of our retirement accounts for another 34 years. Surely the markets will have rebounded by then. Heck, they may rebound by Christmas, which would keep us from regaining our losses if we pulled out. Another important tidbit I failed to add is that despite my $1100 dive, I'm still up about 13% for the year. So my gain wasn't 28% or whatever. Big deal. I'm still not going to sniff at anything over 6%. My husband's funds have gained as well, though not as much as mine have (his are a lot more volatile and have been dippier this year). We haven't lost any of our initial investment, but isn't that a risk you take when lending money?
There are two lessons to be learned here. First one is don't panic. The market fluctuates, your investments can go up or down, and if you realize that you won't act irrationally and sell off before a big rally. The second lesson is not to follow your retirement accounts too closely (provided you're at least several years away from retirement). Vanguard, for example, sends a quarterly statement. When you're more than 20 years away from retirement, glancing over your funds every three months is about all the monitoring they need.
Are you kidding me?
My husband and I are 25 years old, and by law, with a couple of exceptions, cannot enjoy the fruits of our retirement accounts for another 34 years. Surely the markets will have rebounded by then. Heck, they may rebound by Christmas, which would keep us from regaining our losses if we pulled out. Another important tidbit I failed to add is that despite my $1100 dive, I'm still up about 13% for the year. So my gain wasn't 28% or whatever. Big deal. I'm still not going to sniff at anything over 6%. My husband's funds have gained as well, though not as much as mine have (his are a lot more volatile and have been dippier this year). We haven't lost any of our initial investment, but isn't that a risk you take when lending money?
There are two lessons to be learned here. First one is don't panic. The market fluctuates, your investments can go up or down, and if you realize that you won't act irrationally and sell off before a big rally. The second lesson is not to follow your retirement accounts too closely (provided you're at least several years away from retirement). Vanguard, for example, sends a quarterly statement. When you're more than 20 years away from retirement, glancing over your funds every three months is about all the monitoring they need.
Labels: planning, retirement
7 Comments:
I thought for a minute there that you were serious. I'm such an idiot.
I check mine retirement account balances properly about annually, when I rebalance if necessary.
Plonkee- This post is strictly tongue-in-cheek, but there are more than a few bloggers who would advocate such a cut-and-run approach. Probably not the best people to consult for advice.
My guess you have already maxed out 2007 contributions, but if you have not this would seem to be a great time to contribute more!
great post!! My hubby rarely looks at the accounts, but I told him we went down thousands in the last month and he shrugged and said, "I am sure it will go back up". We're both 24 so we're not panicking, either. However, it may make sense for those nearing retirement to be invested in less volatile things these years.
I gave up the daily and weekly view a while back.
I know what you mean. I try not to check my investments every day, this causes me to feel like you're feeling.
I think the best route to go is to check them at the beginning of each season and adjust from there :)
You just have to learn to live with the lows. Good luck!
I check our funds monthly, just to keep track. But I've been doing it for years at the end of the month, out of habit and just to keep a running total (especially when earnings reinvest) and it seems that when they do go down, they seem to do so more on that last day of the month! Do folks sell off stocks on 30 day cycles? On the 27th-29th, not so bad; on the 30th/31st dive! On the 1st-5th, climb back up. I'm thinking I'll start checking on the 15th from now on!
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