Does anyone actually retire in this profession?

[BMBiology]

Advertisement - Members don't see this ad

Of all my years in this profession, I only know one pharmacist who have actually retired. Some went to part-time, others were pushed out. Many have refused to retire. I know one 79 year old pharmacist who is still working!

 

[All4MyDaughter]

None. Not even one.

 

[anewmanx]

Does pharmacist retirement look something like this?

 

[BMBiology]

Plenty retire. We've had 3-4 since I started. We have some go part time (I can add myself working 1-2 day/week for a very long time.

Do you work in a union hospital?

 

[Jibby321]

Pharmacists retirement= a heart attack on the job. I know 3 who this happened to. The employer was a red 3 letter company.

 

[xiphoid2010]

Can't see myself retire either. Would step down to 2-3 days week in a hospital just to socialize and keep the mind sharp, the money would just be a bonus. Then again, I was one of those weird kids that missed school 2 months into the summer.

 

[Mur7ay]

I've had two retire within a year where I recently worked

 

[Sparda29]

One of the guys I used to work with retired from the state hospital at age 55, made his 30 years and is collecting a 60% pension (comes out to $100k/year) on that. And now he is working full-time at a private hospital making $140k/year as a staff pharmacist, he plans on working like 6 more years here to get vested for the pension from this place. Then he'll retire again go to per-diem and collect 2 pensions. His kids are currently aged 10 and 8 so their college will be free since he is debt free and owns his home.

 

[anewmanx]

One of the guys I used to work with retired from the state hospital at age 55, made his 30 years and is collecting a 60% pension (comes out to $100k/year) on that. And now he is working full-time at a private hospital making $140k/year as a staff pharmacist, he plans on working like 6 more years here to get vested for the pension from this place. Then he'll retire again go to per-diem and collect 2 pensions. His kids are currently aged 10 and 8 so their college will be free since he is debt free and owns his home.

Stuff like that ^^^^^^^^ gives me hope that this would be a fulfilling career choice. No one keeps working like that unless there's something about their job they find fulfilling; especially grumpy old people.

 

[Sparda29]

so he made ~170k as a staff pharmacist? >$80/hr?

Nah I believe it was like $130k salary and then he cashed in like $40k worth of paid time off. That $40k gets added to count for the final year salary and that's what his pension is based off.

 

[Sparda29]

Stuff like that ^^^^^^^^ gives me hope that this would be a fulfilling career choice. No one keeps working like that unless there's something about their job they find fulfilling; especially grumpy old people.

Except he graduated from pharmacy school in the 70s, paid for his school by working part-time and summer-jobs.

The reason he got into pharmacy. He turned 20 around the time the Vietnam War drafting started and his dad was like "I hope you get drafted, the military will straighten you out." At the time he was working part-time as a stock boy at a pharmacy. One day he was watching the pharmacist just sit there for hours just reading multiple newspapers and magazines page by page so in his head he went "hmm, I can do that". 4 years later he was a pharmacist.

This dude has a chill life. Drives an awesome Corvette, when he was per-diem at my hospital he'd work like 2-3 shifts a week at $75/hr. He'd spend the rest of his time golfing. He usually picked up 3pm-11pm shifts so he'd wake up at 6AM, go golfing with the guys, run some errands then go to work, sleep, repeat.

 

[Hope1974]

Pharmacists retirement= a heart attack on the job. I know 3 who this happened to. The employer was a red 3 letter company.

I agree. The ones I knew got pushed out. I heard about two that died while working.......same employer. One had cancer, the other dunno, but I ran into 2 women still working in retail who have cancer. I know another one who's been working since I was in diapers and has been moved to another store(I think they are trying to get rid of her), she didn't have any kids- I believe she should have stacks. I know another that worked at the rival for some 20some years on night shift(yes,on night shift), went to red, is still working night shift and picks up the little left over shifts they now have....can u believe red offers sometimes only 3 or 2 hour shifts. This is in Arizona. In South Florida there's no overtime.

Oh but wait.....I just remembered the only pharmacist I do know is retiring................he has to. He's done 30 years, no kids not married. He's set. Not to mention his pension plan is 75% of the salary he will end at next year.....and he never really had to sweat like most of u pharmacists.

 

[anewmanx]

Except he graduated from pharmacy school in the 70s, paid for his school by working part-time and summer-jobs.

The reason he got into pharmacy. He turned 20 around the time the Vietnam War drafting started and his dad was like "I hope you get drafted, the military will straighten you out." At the time he was working part-time as a stock boy at a pharmacy. One day he was watching the pharmacist just sit there for hours just reading multiple newspapers and magazines page by page so in his head he went "hmm, I can do that". 4 years later he was a pharmacist.

This dude has a chill life. Drives an awesome Corvette, when he was per-diem at my hospital he'd work like 2-3 shifts a week at $75/hr. He'd spend the rest of his time golfing. He usually picked up 3pm-11pm shifts so he'd wake up at 6AM, go golfing with the guys, run some errands then go to work, sleep, repeat.

Hmm... sounds like the life to me! I currently get 4k a month tax free (disabled vet,) it goes down to 2k if I work. Still, that's a 2k buffer tax free. I have no debts.

I think I could get away with working 20 hours a week and still be a happy man, seriously.

 

[trailerpark]

Seriously if I had 4k a month tax free I would never work a day in my life. That's 48k a year tax free!? Isn't that about the same as someone who makes 70k-ish? Why work? And where do I sign up!

 

[anewmanx]

Seriously if I had 4k a month tax free I would never work a day in my life. That's 48k a year tax free!? Isn't that about the same as someone who makes 70k-ish? Why work? And where do I sign up!

United States Military Recruiting Station.

Then get 100% disabled.

Theeen you get around 3k tax free for disability comp and around 1k tax free for SSDI.

My wife and I want to have more kids, and I'd like to provide them with a better future than I can on my current salary. Also...., well, the biggest thing is I don't want them to always see me as that guy who got crippled and then did nothing with his life. I think it's more about that than anything. I'd be come a medical doctor, but I honestly couldn't physically handle the residency period or the rigors of medical school.

I was forcibly retired when I was 27. 😛 Back in 2010

 

[trailerpark]

Tell us all about your injuries/disability. I'm curious.

 

[Momus]

Hate kids... but I want to pass along genetic materials just like how my ancestors haven't failed to do consistently every 25 years for the past 4 million years. I mean if I stop now this train of wreck will end! I can't let that happen LOL

I'd want two only. They are the biggest money pits and time hog. One each to replace each parent. 2nd kid to backup the other. I am 100% rational. Fu3k.

 

[anewmanx]

Tell us all about your injuries/disability. I'm curious.

Eh sure, why not.

My right arm was broken backwards at the elbow during a training accident while I was prepping for Afghanistan. We were brushing up on our hand to hand combat skills and the guy threw his entire body weight on top of me. (We were both 200+ pounds.) Suffice it to say my bones shattered like sugar cane, bad enough that there was significant bone marrow edema. My ulnar collateral ligament separated from my ulna, taking a piece of bone with it. Some of my nerves were stretched so far that they were torn from the muscles in my forearm and hand. All of that could have been recovered from, but my Sgt. relocated my arm while I was passed out / halfway delusional from the pain. Not sure if it was before or after I blanked. Just heard it happened from my friends who were there. They put my arm back in assuming it wasn't broken and didn't send me for medical treatment, told me all I had was a dislocation. The next day I went to medical for some pain meds because my elbow as the size of a softball. When they did xrays, examined the arm, etc... they were horrified.

Long story short, a series of bad doctors and physicians assistants refused to give me surgery to relieve the pressure in the arm. I ended up with pretty significant nerve damage. Arm went from somewhat functional to paralyzed for quite a few months. Took over six months to be able to hold a cup again. With the years it became... reasonably functional. I have no strength in it though. I drop things all the time.

I never was given surgery to repair any of the structural damage. After being examined by the surgeons at my next station, they realized I had Ehlers Danlos Syndrome (mutated collagen.) I'm a bad candidate for repair; you could end up having to repeat the surgery five times. Also, my skin tends to rot whenever my arm is in a cast in a matter of less than two weeks. I also atrophy about 5x faster than a normal person so post surgical immobilization isn't a possibility. You could use cadaver parts in me, but eventually my body would regenerate them with my screwed up collagen again. So it's kinda pointless.

I also had a translongitudal split tear of my peroneus brevis tendon in my ankle that left me with an unusual gait and led to weakness in my right knee. Now I walk with a cane due to dislocations.

I have a torn muscle in my back that re-tears every few years now. I also have torn both of my rotator cuffs and they continue to re-injure every few months. Again, no one wants to give me repair surgery because of the EDS. I don't blame them. Now I just live a careful life.

I also had some.... well, let's just say I didn't adjust well to the loss of the use of my arm and ended up with a fair anxiety problem. While manageable, I'm far from a normal person. Touch agoraphobic, antisocial, etc...

Technically my combined disability rating is 90%, but they pay me at 100% because I can't be hired for my previous career (Correctional Officer.)

Veterans affairs uses fuzzy math to combine disabilities. If you have one rated 50% and another at 25%, you aren't 75% disabled. They take 50% and (25% of 50%,) giving you 62.5% disabled. To get to 90% I had to have injuries at 50%, 50%, 30%, 10%, and 10%. They round up from there.

Edit: forgot to mention the never ending pain in the arm. It never stops and I'm super prone to drug allergies so I avoid meds. For an amusing example I'm allergic to solumedrol.

Here's an awesome old video of how the arm was working six months after the injury.

 

[anewmanx]

Hate kids... but I want to pass along genetic materials just like how my ancestors haven't failed to do consistently every 25 years for the past 4 million years. I mean if I stop now this train of wreck will end! I can't let that happen LOL

I'd want two only. They are the biggest money pits and time hog. One each to replace each parent. 2nd kid to backup the other. I am 100% rational. Fu3k.

If you give them a reasonable life, not a cushy one, they aren't much of a money pit. Plus, with enough of them, you can get your taxes waaaaay down! 😉 Then they become money MAKERS.

Hire yourself an illegal live in immigrant maid for pennies and a free place to sleep, and you've got the time suck problem taken care of. The world is full of possibilities!

 

[confettiflyer]

Eh sure, why not.
[/MEDIA]

holy **** dude.

 

[anewmanx]

holy **** dude.

Lol, don't worry, it's not that bad now. It doesn't shake anymore, I just don't have grip strength. Slight tremor in the cold.

It was a wicked cool recovery though. Five years later and the arm is mostly working. The cool part, well, not so cool part is that my ulnar nerve with sublux over a jagged piece of bone every time I move my arm in an arc like a person were doing a curl. Just as it crosses the bone the arm tremors for a second, then it's mostly back to normal. Hurts like a bitch. Now that scar tissue has built up around the nerve it becomes a little less noticeable with every year. Really the only way people can tell is if they shake my hand, or you notice it doesn't swing when I walk.

I'm pretty much left handed now. I consider myself very fortunate and would do it all again. I just wish they had retained me instead of giving me early retirement. They retain the amputees... 15 degrees more of rotation and that probably would have been me.

 

[Jibby321]

I agree. The ones I knew got pushed out. I heard about two that died while working.......same employer. One had cancer, the other dunno, but I ran into 2 women still working in retail who have cancer. I know another one who's been working since I was in diapers and has been moved to another store(I think they are trying to get rid of her), she didn't have any kids- I believe she should have stacks. I know another that worked at the rival for some 20some years on night shift(yes,on night shift), went to red, is still working night shift and picks up the little left over shifts they now have....can u believe red offers sometimes only 3 or 2 hour shifts. This is in Arizona. In South Florida there's no overtime.

Oh but wait.....I just remembered the only pharmacist I do know is retiring................he has to. He's done 30 years, no kids not married. He's set. Not to mention his pension plan is 75% of the salary he will end at next year.....and he never really had to sweat like most of u pharmacists.

Jesus H Christ.

 

[297point1]

Eh sure, why not.

<MEDIA>

Umm...Wow?

 

[297point1]

During a lunch conversation recently (last 3 months) with a DM for a large community employer (but not one of the big three): "We've got a lot of guys who won't retire because their retirement accounts took a hit with the bad economy."

They are still trotting out this same line. Am I the only one to recognize that the Dow and S&P 500 are at all-time highs? If they have been properly managing their finances, they've probably made back all of their losses from 2008-2012, and then some. Their retirement accounts are just fine...they are working becasue they want to, not because they have to.

Whether or not this is good for the profession is a different matter entirely.

 

[anewmanx]

"We've got a lot of guys who won't retire because their retirement accounts took a hit with the bad economy."

You know, I never considered this. That might explain a lot of why the market is plugged full of pharmacists that eat dust and **** rust.

 

[trailerpark]

During a lunch conversation recently (last 3 months) with a DM for a large community employer (but not one of the big three): "We've got a lot of guys who won't retire because their retirement accounts took a hit with the bad economy."

They are still trotting out this same line. Am I the only one to recognize that the Dow and S&P 500 are at all-time highs? If they have been properly managing their finances, they've probably made back all of their losses from 2008-2012, and then some. Their retirement accounts are just fine...they are working becasue they want to, not because they have to.

Whether or not this is good for the profession is a different matter entirely.

My grandmother is great with finances and also lost a lot a few years ago and now she's just about fully recovered so I agree. They must be terrible with their finances.

 

[xiphoid2010]

During a lunch conversation recently (last 3 months) with a DM for a large community employer (but not one of the big three): "We've got a lot of guys who won't retire because their retirement accounts took a hit with the bad economy."

They are still trotting out this same line. Am I the only one to recognize that the Dow and S&P 500 are at all-time highs? If they have been properly managing their finances, they've probably made back all of their losses from 2008-2012, and then some. Their retirement accounts are just fine...they are working becasue they want to, not because they have to.

Whether or not this is good for the profession is a different matter entirely.

But don't forget the difference those years made on their projected retirement date.

In July 2007, S&P was at 1550. Had it grown 7%/yr, it would be 2335 today. Instead we are still <2000. So people are still at least 2 years behind on their retirement.

The picture is even worse if go back to the dot.com bomb. S&P500 was at 1500 in 2000. Yes, 14 years ago. At 7% annual growth, it should be over 3600 today. Instead we didn't get back to 1500 until 2013. People who were nearing retirement in the 2000s got royally screwed. Over a decade lost...

 

[BMBiology]

^^ if they had maxed out their 401 k from 2008 to now, they would have an extra 200 k in addition to recovering all of their losses plus some gains.

 

[xiphoid2010]

^^ if they had maxed out their 401 k from 2008 to now, they would have an extra 200 k in addition to recovering all of their losses plus some gains.

You are assuming their retirement plan did not involving maxing out 401k to begin with. Say you had been maxing out 401k and calculated in 2007 that you would have enough to retire now. Instead you are still over 15% short.

 

[BMBiology]

You are just looking at the downside of the S&P crashing. The upside is the opportunity to buy at dirt cheap prices. Those who did were handsomely rewarded.

If they had kept on maxing out their 401 k, they would be in a better position today as a result of the crash .

 

[rxwaiting]

Old pharm don't quit b/of high wage. Cannot walk away from 60 plus an hour even if old.

 

[confettiflyer]

Not a fan of the valuations right now but I don't see any good options....sitting on a pile of cash seems funny to me.

I mean I have like a 30-40 year horizon (infinite, maybe....see retirement thread, hah), should i just stay the course and stop checking my stuff or attempt to time the correction?

Bah.

 

[Sparda29]

Being a pharmacist/doctor isn't a physically demanding job asides from the long periods of standing in retail chains. At my independent, I sit in a Italian leather chair so it's pretty comfy. Pharmacists can retire, but they'll just start working somewhere else while collecting the pension from the original employer.

Collect $100k/year pension. Work per-diem at another place like 3 days a week for a month, take the next month off for vacation, repeat. Assuming $60/hr x 8 hr/day, comes out to $5760 per month + pension. All assuming you have no debt though.

 

[sakigt]

The older Pharmacists Ive met that are still working have partially but off retirement to subsidize their kids.

I wish I was being subsidized. 🙁

 

[xiphoid2010]

You are just looking at the downside of the S&P crashing. The upside is the opportunity to buy at dirt cheap prices. Those who did were handsomely rewarded.

If they had kept on maxing out their 401 k, they would be in a better position today as a result of the crash .

Again, whether they maxed out during the crash is irrelevant, as the result is still >15% less than if the market returned 7% annually from 2007-2014.

Only young people who started 401k at or right before the crash benefited. We have the time to ride out the drip and rise. But if your calculated retirement date is around now, you are still trying to make up for the shortfall.

 

[Momus]

Again, whether they maxed out during the crash is irrelevant, as the result is still >15% less than if the market returned 7% annually from 2007-2014.

If you are still accumulating, you should still be buying. In this scenario, prospect retirees are delaying retirement, are working still and not buying on the downturn? They could have been smiling at the end but if they think like you "irrelevant case", then they will be SOL . That's a classic mistake of not buying during the downturn thinking bad times last forever.

I'd not make that mistake.

 

[BMBiology]

Again, whether they maxed out during the crash is irrelevant, as the result is still >15% less than if the market returned 7% annually from 2007-2014.

Only young people who started 401k at or right before the crash benefited. We have the time to ride out the drip and rise. But if your calculated retirement date is around now, you are still trying to make up for the shortfall.

Let's me realistic here. From early 2000s to 2007, there was a major bull run and you still expect the market to increase by 7% annually from 2008 to 2014 as well? So about 14 years of the bull market?

 

[xiphoid2010]

Let's me realistic here. From early 2000s to 2007, there was a major bull run and you still expect the market to increase by 7% annually from 2008 to 2014 as well? So about 14 years of the bull market?

Didn't you read my previous post? S&P500 was 1350 in 2000, and we didn't get back to 1350 until 2013. That's 0% net gain over 13 years. People who had planned to retire during that lost decade basically had to keep working long after they should.

 

[BMBiology]

^^ well duh the people who were planning to retire right before the market crashed got screw. You need to tell people that?

However that doesn't explain why people are not retiring now especially if they had purchased when the market was down. They are better off today because of the recession if they had kept on buying .

 

[oldstock]

But don't forget the difference those years made on their projected retirement date.

In July 2007, S&P was at 1550. Had it grown 7%/yr, it would be 2335 today. Instead we are still <2000. So people are still at least 2 years behind on their retirement.

The picture is even worse if go back to the dot.com bomb. S&P500 was at 1500 in 2000. Yes, 14 years ago. At 7% annual growth, it should be over 3600 today. Instead we didn't get back to 1500 until 2013. People who were nearing retirement in the 2000s got royally screwed. Over a decade lost...

what comes up must come down !! But if anyone had been following the market, they must have already known this... Timing is everything !! 😉

 

[DocJL]

Eh sure, why not.

Cringe worthy video.

ummmmm, I guess that rules out dental school.......



Thanks for your service, DevilDog.

 

[xiphoid2010]

^^ well duh the people who were planning to retire right before the market crashed got screw. You need to tell people that?

However that doesn't explain why people are not retiring now especially if they had purchased when the market was down. They are better off today because of the recession if they had kept on buying .

Let's do a bit of math to illustrate.

S&P500 in 2000: 1520
S&P500 today: 1930
Net gain: 27% over 13 years, or 2.15% average annual gain.
Inflation: 2.38%/yr during this period
Expense ratio of an typical index fund: 0.2%/yr

Adjusted return of S&P500 during the 14 years since 2000 = negative 5.8% (- 0.41%/yr). In another word, your portfolio is worth less than the sum of what you had in 2000 + what you had put in since then.

So counting inflation and expenses, we actually haven't recovered. 14 years is 40% of a 35 year career. This completely ruins the retirement planning for those people nearing retirement age, and that's why they haven't retired, or even retired but had to go back to work.

 

[xiphoid2010]

what comes up must come down !! But if anyone had been following the market, they must have already known this... Timing is everything !! 😉

It's not usually practical to time the market, but fate plays a huge hand in the outcome. We plan for retirement based on an reasonable estimate of average 7% return/yr. But that calculation method is flawed.

Let's look at 2 scenarios: Person A and B, both have 35 years career, both annually contribute $17500/yr to retirement fund.
Person A: Hit with 14 years of 0% return on stock market right from the start, then the stock market turned 7%/yr for the remaining 21 years. Ending retirement money = $1,059,601
Person B: Stock grows 7% for first 21 years as usual, but then hit him with a 0% return for the last 14 years. Ending balance: $1,829,039

A $770K difference if you get hit a bad stock market early on. OUCH!

 

[anewmanx]

Cringe worthy video.

ummmmm, I guess that rules out dental school.......



Thanks for your service, DevilDog.

Thanks for the compliment, I wish I could have actually done something useful.

Side note, thanks for calling me a marine haha, I was army. 😉 I wish sometimes I had been a marine instead, but they didn't have a medic position. To be a medic in the marines you have to join the navy as a medic and be assigned to a marine core unit. I just couldn't see myself being enlisted navy... I come from an Army and Air Force family.

 

[BMBiology]

Again, no one is arguing with you that if you had planning to retire in 2000 or 2007, right before the market crashed, then you were screwed.

Seriously? You are comparing to 2000 (during the tech bubble) to today? If this same person had cashed out in 2007 then he would be fine...wouldn't he?

The point I am making is if a pharmacist was planning to retire in 2008 but couldn't because the market crashed and if he had kept on investing between 2008-2014, he should be better off today because of the gain he would have made between 2008 to 2014. He would be buying at the bottom of the market and cashing out at the top. There is no reason why he can't retire today.

 

[xiphoid2010]

The point I am making is if a pharmacist was planning to retire in 2008 but couldn't because the market crashed and if he had kept on investing between 2008-2014, he should be better off today because of the gain he would have made between 2008 to 2014. He would be buying at the bottom of the market and cashing out at the top. There is no reason why he can't retire today.

Keep in mind that by the 2008 crash, the market havent even recovered from the 2001 crash. Lol, sure people push their retirement back to compensate. So lets say 2007 folks will retire in 2014, 2008 folks in 2015, 2009 folks in 2016, 2010 in 2017... And you are wondering why they are still working?

PS, see my previous post. It's worse to get hit with bad return earlier on. The true cost of the double 2001/2008 crash won't fully hit until those who started their career in 2000 near their retirement age and realize they are far short of their goals.

 

[oldstock]

It's not usually practical to time the market, but fate plays a huge hand in the outcome. We plan for retirement based on an reasonable estimate of average 7% return/yr. But that calculation method is flawed.

Let's look at 2 scenarios: Person A and B, both have 35 years career, both annually contribute $17500/yr to retirement fund.
Person A: Hit with 14 years of 0% return on stock market right from the start, then the stock market turned 7%/yr for the remaining 21 years. Ending retirement money = $1,059,601
Person B: Stock grows 7% for first 21 years as usual, but then hit him with a 0% return for the last 14 years. Ending balance: $1,829,039

A $770K difference if you get hit a bad stock market early on. OUCH!

When the market crashed, you could consider yourself lucky if you got hit with 0% return. In reality, you would be awarded with NEGTIVE return = losses when the market crashes. This will take time for anyone's portfolio who got hit to get back to even if you are lucky (e.g. Have you heard of GM in '08-09 ??) before you can assume it back to giving you any return. Also, in your calculation, you did not account for any potential loss... Or now because you can't time the market or bad luck (whatever you want to call it), you would be buying/adding to your portfolio at the peaked prices when the market hits the top, i.e. buying/adding at the worst time and the worst prices possible !! Then practically you can forget any return for your lifetime 😉

The point is, if you can't time the market, then yes your stock portfolio/retirement is pretty much tied to fate and luck. It is, indeed, all about the timing !! Again, case in point, GM of '08-09 !!

Oh, when the whole market crashes, the indices are going down with it too.... (duh) oooophs 😉

 

[xiphoid2010]

When the market crashed, you could consider yourself lucky if you got hit with 0% return. In reality, you would be awarded with NEGTIVE return = losses when the market crashes. This will take time for anyone's portfolio who got hit to get back to even if you are lucky (e.g. Have you heard of GM in '08-09 ??) before you can assume it back to giving you any return. Also, in your calculation, you did not account for any potential loss... Or now because you can't time the market, you could possible be buying/adding to your portfolio at the peaked price when the market hits the top !! Then you can forget any return for your lifetime 😉

The point is, if you can't time the market, then yes your retirement is pretty much tied to fate and luck. It is, indeed, all about the timing !! Again, case in point, GM of '08-09 !!

I used 0% since that's the return on S&P500 for 2000-2013. It also simplifies calculation, since if you calculate a negative value, say -50%, then you have to offset with a different number, or 100% gain to arrive at 0% return, and to do that for each year to arrive at an average return would involve more math than I care to do. A 0% in this case just so happens to match what happened in recent history. 🙂

And I agree with you. We don't even have to go as extreme to putting all eggs on a single stock like GM. Use china's stock index as another example, the shanghai composite, pretty big right? Well, it was 6000 in 2007, now it's 2200. Good thing the average chinese don't use 401(k)s for retirement.

 

[oldstock]

I used 0% since that's the return on S&P500 for 2000-2013. It also simplifies calculation, since if you calculate a negative value, say -50%, then you have to offset with a different number, or 100% gain to arrive at 0% return, and to do that for each year to arrive at an average return would involve more math than I care to do. A 0% in this case just so happens to match what happened in recent history. 🙂

If you can't time the market, it is indeed fate and luck that would allow us to offset our losses with anything at all 😉

And I agree with you. We don't even have to go as extreme to putting all eggs on a single stock like GM. Use china's stock index as another example, the shanghai composite, pretty big right? Well, it was 6000 in 2007, now it's 2200. Good thing the average chinese don't use 401(k)s for retirement.

Dang those Chinese are smart. They put all their money into their businesses or in gold or even under their mattresses and do not even bother playing with safe things like mutual or index funds.... lol 🙂

 

[BMBiology]

In July 2007, S&P was at 1550. Had it grown 7%/yr, it would be 2335 today. Instead we are still <2000. So people are still at least 2 years behind on their retirement.

The fallacy of this statement is that you are assuming you can only retire when the S&P is at its peak. If you have been working as a pharmacist and have been making good money, you can't retire when the S&P is 5% below its peak?

If you are comfortable with retiring in 2007 when the S&P is at 1550, you can certainly retire today when the S&P is 1930 because:

(1) Inflation is only 2-3% per year so 1930 in 2014 is still better than 1550 in 2007
(2) Since you have been working the last 7 years, you should have more retirment money today than in 2007.
(3) For obvious reason, you wouldnt need as much retirement money if you are retiring today rather than 2007.