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What we need to keep in mind that some people did save for retirement but for some it was lost due to circumstances beyond their control. What about people who had substantial retirement investments connected to WorldCom, Enron or Bernie Madoff Securities?
I would call investing either all or a substantial portion of one's retirement savings in a single company's securities very poor strategy, unless someone is willing to accept a very high level of risk, in return for a possible substantial reward.
For retirement savings, better to spread contributions among the securities of multiple companies, or in mutual funds that have holdings in multiple companies.
Through the 401(k) retirement plan, employees chose to put much of their savings in Enron shares, and the company made contributions in company stock as well. But around the time Enron disclosed serious financial problems last month, the company froze the assets in the plan because of an administrative change. For several weeks, as the stock lost much of its value, workers stood by helplessly as their retirement savings evaporated. They were not allowed to switch investments at all -- even though the plan had far less risky choices.
The unfortunate timing caps a year of pain for Enron's workers. At the end of last year, the 401(k) plan had $2.1 billion in assets. More than half was invested in Enron, an energy conglomerate. Since then, the stock has lost 94 percent of its value.
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Originally Posted by Canine*Castle
I agree and you think like I do. I'm retiring at the end of this school year and I'll be 69 years and 7 months old. I worked longer than I wanted to. I did wait until I was 66 to collect ss along with my paycheck and although I'll take a huge cut in income, I'm done.
Oh did I ever think of that! Talk about tempting taking social security in conjunction with a paycheck but having 85% of my benefit subject to federal taxes made me think twice. I knew it would be a bad move but I was so tempted.... and then I would have grown used to living with all sorts of extra money so when I did have to stop working I would have felt the pain.
I would call investing either all or a substantial portion of one's retirement savings in a single company's securities very poor strategy, unless someone is willing to accept a very high level of risk, in return for a possible substantial reward.
For retirement savings, better to spread contributions among the securities of multiple companies, or in mutual funds that have holdings in multiple companies.
My step-father worked for PG&E [Pacific Gas & Electric] They sold him stock at half-price, he had a percentage of every paycheck go into buying company stock. After 40 years with the company he had a lot of PG&E stock.
I do not think that was a bad idea on his part.
He went into retirement with the IBEW pension and his dividend income.
His mistake was that he allowed his Cost-Of-Living to increase every year as his retirement went along. By the time he reached his 70s he had began selling stock to maintain his lifestyle. In his early 80s he ran out of stock, and his pension was not enough.
With the exception of my dad all related males lived to their early 90's so that is what I am counting on.
Lucky guy, I haven't found any male in my direct bloodline that made it to 75yo. But I am still planning financially to live to late 80's anyway because I am a "belt & suspenders" type guy - why take the chance?
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