If you’re saving into a total market index fund, your returns should go up in relation to inflation OVER THE LONG TERM.
I’ve been investing for decades in VTSAX and similar across a few retirement accounts, and while there have been ups and downs, since I don’t touch it and keep adding to it in small amounts over time, I’ve had great success with beating inflation while doing absolutely nothing to manage my investment.
Yes, there was basically a whole decade that didn’t do well, the following decade more than made up for the slow returns.
That’s just how retirement investments work. You don’t look at a single quarter, year, or even decade, you look at your entire working life plus retirement. And the market has always been ahead at those time frames.
That’s just how retirement investments work. You don’t look at a single quarter, year, or even decade, you look at your entire working life plus retirement. And the market has always been ahead at those time frames.
I feel like that is unfair without more data.
Did the boomers lose a decade of growth on their retirements?
Relative to them the gen x’rs and millennials have had 1/5 less time for their assets to grow (assuming you save for around 50 years) when compared to wealthier generations. And it was relatively early in their careers when the money would have the most impact.
Yup, there were a large number of downturns over the decades. The 90’s and the 00’s were squarely in the tail end of boomer retirement years and they ended up just fine.
The great depression bounced back and even if you invested at that time, over the long term you would have come out ahead of you just held onto a total market position.
Pull up any Dow Jones historical chart and you’ll see plenty of flat or short term dips, ones that held for several years, but in the end the line still went up faster than inflation.
You are right, but what if rampant inflation makes all of our saving worthless?
These constant cycles of boom and bust have also effectively lost me 10 years on my 401k.
I don’t have the same faith you do that the market will even exist in 20 years, let alone my saving will do anything.
Sadly I’ve talked to 3 or 4 financial advisors and nobody has an answer other than “trust the market”.
Inflation makes investments rise too. It’s the people without them that are screwed by it.
True, not sure why I didnt think of that.
Maybe I mean any money we have in our savings accounts.
If you’re saving into a total market index fund, your returns should go up in relation to inflation OVER THE LONG TERM.
I’ve been investing for decades in VTSAX and similar across a few retirement accounts, and while there have been ups and downs, since I don’t touch it and keep adding to it in small amounts over time, I’ve had great success with beating inflation while doing absolutely nothing to manage my investment.
Yes, there was basically a whole decade that didn’t do well, the following decade more than made up for the slow returns.
That’s just how retirement investments work. You don’t look at a single quarter, year, or even decade, you look at your entire working life plus retirement. And the market has always been ahead at those time frames.
I feel like that is unfair without more data.
Did the boomers lose a decade of growth on their retirements?
Relative to them the gen x’rs and millennials have had 1/5 less time for their assets to grow (assuming you save for around 50 years) when compared to wealthier generations. And it was relatively early in their careers when the money would have the most impact.
Yup, there were a large number of downturns over the decades. The 90’s and the 00’s were squarely in the tail end of boomer retirement years and they ended up just fine.
The great depression bounced back and even if you invested at that time, over the long term you would have come out ahead of you just held onto a total market position.
Pull up any Dow Jones historical chart and you’ll see plenty of flat or short term dips, ones that held for several years, but in the end the line still went up faster than inflation.
https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart
Every generation had multiple periods where the market looked poor, but if you don’t prepare for the future, you guarantee a shitty retirement.
If you save and prepare for the future, you at least have a chance of being comfortable in your old age.
My form of “saving” is to pay my mortgage. I don’t know how much houses will cost in the future, but I will have mine. I will have enough.