Future Insight – The Jenkins
Future Insight – The Jenkins
120 comments
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If you come from the future and the best investment vehicle you can think of is a 401k, you don't deserve to be a time traveler.
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Maybe there's a framework of rules that the time traveler must adhere to (or risk being disintegrated by the time police).
For example, specific knowledge of the future is off-limits, but it's OK to give basic advice as long as it's already general knowledge for the time period you're traveling to. Make sound investments, eat right, exercise, don't smoke, etc.
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Maybe it's not the best, but it's the correct one. Clearly future self knows something we don't
In before future self just forgot to check and is just trying to make the best use of it
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Maybe "buy weyland yutani stock" is timetraveler insider trading
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A Roth 401k or Roth IRA is much better than a regular 401k
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If you can contribute to them.
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If you can alter the future it might make sense. Say I tell you to invest in whatever comes after NPTs. Maybe your investment will alter the course of what happened. However I seriously doubt that 10% of your income in an index fund will alter much. Also, there is a problem with getting money too early. You go back and give young you lottery numbers, they make bank and die of an O.D. a decade later.
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Lol 10-15% of our income? I'm sorry... But who can afford that? We're getting so fucked right now by greed in this country...
My power bill was $500 last month for a two bedroom apartment. This is because I live in a city with the highest energy rates in the nation, all because the company and our local governments are absolutely lousy with corruption. They have posted obscene record profits for the last half a decade while everyone in the city suffers.
My rent was also 21% higher this year than it was in 2020. My landlord bought this place a decade ago at a bankruptsy auction, but like, fuck me right? Gatta keep those rates up when the rest of the city goes up.
I also haven't saved money since around 2019, since I went four years with a 0% raise due to the company I work for struggling. We were bought out by another company with tons of money, but they decided we were overpaid, since they live in a cheaper city.
My story is not unique. My story is not special. I hear a similar one from people every week. Retirement is a luxury most post-boomers will never experience, no matter how hard we work.
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So you're supposed to do 50-30-20 Meaning 50% on needs 30% on wants 20% investing
You might be thinking "Ericbomb, how does one keep their needs below 50%, when the median rent in the US is $2,000, and median household income after taxes/withholdings is near 40k?"
Wonderful question!
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Australia has a Superannuation Guarantee. It's currently at 11% and will go to 12%. Employers get fined if they don't pay it to their workers.
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I've never owned a gun in my life. The day I go to buy one is the day I start planning for my "retirement."
I'm still doing the 401k thing and trying to save on the side, but just like homeownership, retirement is for "other people," not me :/
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If you have perfect knowledge of the future and know which stocks will do well, why bother with trying to diversify your portfolio to try to mirror the market?
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So, as it turns out there are a few big reasons.
- it's a cosmic felony
- causing improbable events creates a new timeline which increases entropy in all probable realities, which can have some drastic (and usually negative) effects.
- most time travel agencies (which is what most people can afford) use technology that doesn't actually allow for free will, that's why it's mostly sold for vacations.
- you can alter/push some decisions, but for most people it's not gonna be successful stocks.
- older technology was advanced calculation in a realistic simulation. Most people just wanted an old memory or to get closure. Some people just try a different meal or movie choice, the experience is all that matters.
- time mercenaries. We're actually not sure who these guys are, but we also don't wanna know either. Some say they're who cause spontaneous combustion and embarrassing deaths.
- most forms of actual time travel leave the user stranded, with chronic or terminal illness (and sometimes amnesia), and in some cases fading/poofing out of existence when certain thresholds are crossed.
- On top of that, new timelines of you typically aren't experienced by you. It's a different you. So that was nice of you.
- time spiders. You don't want to know.
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Who knows if you really want to have much much wealth in the future.
Maybe he would have made the deal of his life the next week if his future me wouldn't have intervened; but 30 years later everybody that ever had more than a million gets killed by the revolutionary movement that swapped across the world after society almost collapsed due to greed.
But he managed to reach a time machine, and now he calculated that if he saves a maximum of 15% he will only ever reach 975000 bucks and therefore survive the revolution
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Maybe they're really risk-adverse and don't trust they haven't fucked everything with the butterfly effect just by being there.
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Maybe the butterfly effect is greater than we possibly can imagine?
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In some 401k plans you can invest in specific stocks or at least specificsector funds.
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Old self is greedy and wants young self to reduce the fun of their prime years by locking away money so they can sit on a big ol' retirement fund in their older years. Of course, that's assuming that past performance guarantees future results and that the conditions of the 401k will remain the same. What's to say politicians don't start applying extra taxes on 401k withdrawals? What's to say they won't increase the retirement age?
A lot of people can't spare 10-15% of their income and I'm not so sure the advice is not just a ploy by 401k fund managers to squeeze out extra fees. Maybe it's just a silly little comic and I'm taking it too seriously.
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Young Johnny should ask old Johnny why they don't simply buy a sports almanac
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Because Marty will just steal it. Duh.
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Well. I assume this guy is actually from the future. So in theory wouldn't he know that in the future 401k's have not been taxed into irrelevance? I feel like if he's coming from the future with this advice it's because he feels it's still good advice in his future.
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And then one day you wake up and you are that "old" person. Then you realize you're screwed: the health problems that aren't a big deal if they're treated are debilitating because you can't afford treatment. Those issues you assumed are going to kill you don't, and instead you linger for decades with a garbage quality of life.
The worst part is you aren't even that old: mentally you're still pretty much the same person you were in your 30s, just trapped in a body that's slowly falling apart and needs constant maintenance.
Yes, you need to strike a balance -- but not doing what you can to financially plan for old age is fucking stupid.
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and then those health problems turn out to be so expensive that the cost far exceeds what you can afford through your 401k anyway. I'm not saying no planning should be done, I'm saying that your planning should lean more favorably toward the present than the far future. For many, 10-15% of income is so much of a sacrifice that I'm willing to bet the payoff wouldn't be worth it in most cases.
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Shit ya'll are making me rethink leaving the state.
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Agree a lot can't spare it. Getting to 15% is pretty tough. You can do the math though and see that even 10% will likely make it tough to maintain your current lifestyle with inflation accounted for in the absence of active cash flow. Don't forget when you have more leisure time you are more likely to find things to spend on and also reserves for health issues / other surprises is important too. Sorry to sound like a dad / investment advisor, but I don't think it's a ploy so much as the terrifying reality that most of us are under prepared for.
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People need to start living well below their means, not right at them. Anyone whos lifestyle becomes tough to maintain from putting away just 10% of their income and lives from paycheck to paycheck needs to re-evaluate their living and financial conditions. Either learn to live with less/spend less or go somewhere with cheaper cost of living.
Its not that hard if you never go into debt, don't pay rent, and live minimally. Which I do admit most people are either unwilling or unable to do those things given their life circumstances and responsibilities. God help the ones that signed up for 30 years of mortgage payments at 15% interest tfor that 500,000$ poorly constructed 2 story 1 bath suburbanite home or an ever increasing 1500$ rent each month to some landlord.
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…I'm not so sure the advice is not just a ploy by 401k fund managers to squeeze out extra fees.
Invest in an index fund and the fees are almost non-existant. Invest in several index funds (Large / mid / small cap & emerging markets) so that you don’t have all your eggs in one basket.
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I'll be honest.
I don't bother with a 401k because I don't believe I'll be able to benefit from it.
As in, I will either be dead long before I can touch it without penalty, or society will be so unrecognizable that it won't make a difference either because of extreme inflation or societal collapse/restructure due to exterior factors such as climate change.
If this ends up biting me in the ass, rest assured I'll go back and tell all the commentors who say you'll be sorry and give them their brief dopamine hit from being right. Until then, I guess we'll see.
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You can withdraw from 401ks early if you use e.g. a Roth Ladder. If nothing else, withdrawing with a penalty is still a viable option if you've been investing properly and have an excess of money.
As for betting against the earth, if you're that blackpilled you can make flexible investments by putting money into a Roth IRA, whose principal (not growth) can be withdrawn at any time without penalty. You can't put the money back into the Roth IRA later, however. If your company offers a 401k match you should always always always invest the minimum amount to get the full match, idc how depressed you are.
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Must be nice to have a job that does 401k matching. I had one for about a year, then boom, laid off. Back to part time work that doesn't match. 🤷♂️
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I don't have a match but I still save in my pretax retirement account. If you don't have any available to you through your employer, please look into a Traditional or Roth IRA.
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The matching is meaningless nowadays. At most, some companies will match 1/2% for each 1% up to them giving you like 3%.
There is something to be said about not leaving money on the table, but it's not too different from reaching out to TDAmeritrade and setting up an IRA.
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As a more general PSA: Even without matching, 401ks are still usually (but not always) superior to IRAs. The pros/cons work out differently by individual, so I'll summarize the major differences (This comparison applies to "traditional", non-ROTH accounts[^1]):
- 401ks obviously require a job that offers them. Sometimes, IRAs are better by virtue of being the only option!
- Only 401k savings are protected from creditors (i.e.: bankruptcy) under the ERISA act. That's a big deal when making long-term financial plans!
- IRAs have a substantially lower maximum annual limit for deductible contributions (For young unmarried individuals in 2023: $6,500 vs. $22,500). If you want to contribute more than $6,500 every year, you're going to need a 401k.
- The IRA deductible contribution limit is even lower if you're earning >$73,000 in annual income. In fact, those earning >$83,000, can't deduct any IRA contributions at all[^2].
- Only 401ks are paid before federal tax withholding. In other words; with an IRA, you're paying the cost of letting the government borrow more of your income between annual tax returns relative to a 401k.
- Under a 401k, your employer chooses the institution. This lack of choice generally translates into a worse investor experience (e.g.: higher fees, fewer options, worse support). IRAs are obviously superior in this regard![^3]
- You can combine a 401k and an IRA to bypass (Roth) contribution limits via the so-called "Mega-Backdoor Roth" (... you can't make this shit up). This is great if you have so much income that you've already maxed out your main 401k's contributions and still want to make even more (Roth-only) retirement contributions. If you're already this rich, you should probably be learning about this from your accountant and not the internet...
tl;dr: If you make more than $70,000ish or just want to save really aggressively, 401ks are usually superior. IRAs are mostly useful if you don't have the option of a 401k or prefer an IRA's flexibility over a 401k's higher contribution limit.
[1]: What's a Roth retirement account? It's a type of IRA/401k where contributions are not tax-deductible. Why *would* anyone want to give up those sweet tax deductions, though? Because in exchange your future retired self doesn't have to deal with paying taxes when they take that money back out[4]. This is good for two groups of people: those with low taxable income (<$40,000) & those with excessively high spare income (see "Mega-Backdoor Roth" above). Another side-benefit is that you can withdraw your Roth contributions early with fewer penalties compared to a traditional retirement account (though I personally don't think it's a good idea to opt for a Roth for the "just in case" factor [^5])
[^2]: People who earn less than this can actually make deductible contributions to both an IRA and a 401k, but that's only useful if you're already hitting the $22,500 401k contribution limit... which is kind of hard to manage even near the upper cutoff of $83,000!
[^3]: It's worth mentioning, however, that inactive 401ks (i.e.: 401ks from employers who no longer pay you) can also be freely transferred to any institution of your choosing via a "rollover" 401k account.
[^4]: FYI: with normal retirement accounts, they're actually "tax deferred" rather than "tax free". Basically, you still eventually get taxed when you take money out. Despite this, saving with a traditional retirement account is almost always worth it because putting in 20+% more money per dollar earned is a massive difference growth-wise.
[^5]: What's my beef with using a Roth account as a hybrid retirement/rainy-day account? Well... it's just not good enough at it to justify the opportunity cost of going Roth vs. Traditional. Keep in mind that usually only your original contributions can be taken out early -- any growth is hands-off (before you retire) unless you pay a big penalty. At that point, it's generally smarter to put your rainy-day savings into a high-interest savings account where you'll have full liquidity and immediate access to the accumulated interest. If you're really worried that you'll need more money than that... consider that you could just declare bankruptcy if things go so hopelessly ass-up that digging out becomes impossible -- your 401k is protected!
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Eh, it would be nice to get a larger match (and I did have that influence me in a job decision once) but I gladly make sure I always get the 4% match I have available at my current place. That’s hundreds of dollars a month straight into my tax advantaged investments.
I have to put 5% in to get that 4%. And I find it damn near impossible to leave that money on the table. So one side benefit is that even in a “fix my fucked up finances” situation like I am in now, that is still almost 10% of my yearly salary keeping retirement growing at some level.
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Place I worked at matched 1:1 up to 9%. It happens.
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He should have come back with winning lottery ticket numbers and sports outcomes
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That happened in the previous loop. This time-traveller ruined his life with hookers and blow, so instead of giving his younger self quick riches, he gave solid financial advice instead.
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Fair
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Yeah, future him is a fucking moron.
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You'll be able to get one game, maybe a few in different sports, in the same day if you're lucky. Outcomes will become different soon though..
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What exactly is 401k?
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So if you have a 401(k) you agree to have part of your paycheck go to a fund and your employer matches however much you put in up to a certain percent. It helps get around some taxes when you eventually pull the money out for retirement.
Originally it was supposed to be a supplement for pensions but pensions meant less profits because they need to be fully funded, so over the years big corporations pushed 401(k)s as an alternative to pensions because they can just push that responsibility onto us.
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A defined benefit pension puts market risks on the company. A 401k puts the market risk on the individual.
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The employer matching is definitely not always a thing
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Personally I'm way happier with a 401(k) than a pension. Risk is more distributed with a pension, yes, and many people don't have the knowledge or resolve to properly manage their own retirement funds. But pensions are a royal PITA, way more complicated (and expensive) to manage than a 401k. So if I had to choose between money coming out of my paycheck to go into a complicated expensive pension fund that may or may not be around in a few decades, OR a 401k that I have complete control over and can take with me when I leave the company, I'll take the 401k every day of the week.
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It's like an RRSP.
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A 401K is a USA tax deferred investment account intended for use after age 59.5.
It's name comes from the section of the tax code that discusses it.
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this thread calls out to all the real adults on Lemmy lol. actually learning so much.
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It turns out if you save that 10% instead of giving it to the church you might not be destitute when you retire. Or you can buy the church for assistance and see how that goes.
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What company let's you put a full 15% into a 401k? I mean... sign me up.
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Generally you can put in as much as you want but they only provide matching for some percentage. Usually like 1-5%. There is a total contribution limit but that won't affect most people.
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You can put in a max of 22,500 per year. The employer contribution can be higher.
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The company limits it to a percentage of your paycheck. Where I work it used to be 10% so I was never mathematically capable of maxing the full irs limit, but they moved that to 30% recently.
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You can put however much you want in. Max is like 22k a year. You're probably thinking match, ya basically no company will match 15%.
That'd be too close to a pension fund or something reasonable. We can't have that. The boomers said those were bad, raegonomics are good. Fuck pensions and unions.
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Unions, blegh.
I was forced into a union at my job, and it's horrible. We get tons of time off, full benefits, protection from our employers when they try to violate the contract or do something illegal, and great pay. I'm currently set to retire at 55 years old, with over $10,000 a month income between my pension and 457b.
I mean, what the hell is my $100 a month in union dues doing for me!?
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You can put in however much you want, the company only matches up to a certain low percent though. Typically less than 5%. I personally put 17% of my income into my 401k since I didn’t do anything for about a decade that I should’ve been doing 10% and now I’m trying to catch up, company only matches 3%
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The limits on 401k contributions are federally regulated and are set as a nominal amount.
Employers often have employees select a percentage of their income to contribute, and for very high income earners, 15% might be over the federal limit. Also, employers can match employee 401k contributions. That is usually a percentage match of annual salary up to a given limit (e.g. 2% of salary up to $3000).
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Any company that pays you less than $150,000.
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The company I work for just moved up to 30% of your paycheck. But they don't really match. They say they do, but the max they will match is $750 per year.
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"Come on, you couldn't have brought a Grays Sports Almanac from the future or something?"
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