Straight Story: Rethinking retirement

Economics editor Chris Farrell

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Chris Farrell is the economics editor of Marketplace Money.
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Right now I am wishing I had more cash to invest. Since the rally has started I can't "buy low" so I can "sell high" later.

The reason I can't afford to panic and sell low is that I only have 7 years to retirement and only a nominal IRA ($24,000 as of now) to help support me when I can't work anymore. Yes, I expect to work till I can't.

I vote for Chris for Treasury Secretary, on the platform of reforming the 401K/retirement strategy and properly funding Social Security. In the meantime, how do you invest in TIPS while still having the tax advantadges of making retirement contributions? Can you purchase TIPS as an IRA? Are band CD IRAs a safe option? What other nearly-safe investment options are there in this economy? I would rather my money be safely invested than diversified, even if the return is lower. Thank you.

I'm 54 and my husband is 59. We've recently been in the process of rolling over 401K's with past employers to self directed accounts. Along with re-evaluating our mix of stocks and bonds, our financial advisor is recommending we shift from our primary dependence on large cap stocks to including more mid and small caps. How important is company size in a diversified portfolio?

Mr. Farrell says saving money for retirement is an insurance policy for retirement. On the contrary, paying money into a savings plan is not a premium payment on a quality of life policy. My question for Mr. Farrell is: if a retirement savings plan is insurance, is it insurance against the Social Security pension plan failing? Is (or should) the U.S. SS system be a pension plan for all or a subsistence insurance policy for the society augmented or replaced by any type of quality of life savings plan? For some reason we think the definition of “social security” is guaranteed pension benefits no matter what the social situation (security) is of the recipient.

How do you know that treasuries are so safe? With the deficit so huge and getting bigger won't it get to the point where other countries won't think it's safe to lend to the US? They can't just print more money indefinitely. I think we need to learn that money does not equal security which is what I think is behind all this excess of greed that led to this crisis to begin with.

Give me a break! For years, so called experts (including Chris) have been responding to listeners' fears by stating that, even in bad times, the correct approach to investments is (1) stay calm and take a long-term view, and (2) diversify, with more emphasis in stock/equities the younger you are. Now, Chris says that stocks are unsafe and that T-Bills are the way to go. Thanks for the advice, but IT'S A LITTLE LATE!

My employer-provided 401K (and the various employer-provided 401Ks of everyone i know) doesn't have any safe options - everything is either stock-related, reit, or a "stable-value" fund containing apparently risky paper (many of these "stable" funds have lost quite a bit of value).

In years past, the 401K had a treasury fund, but that is long gone.

Why do you think the fund selections are all so dependent on "bull market" conditions?

Thanks, -margaret mago

As a babyboomer, now having no saving and only small amount in 401K at work, don't know what to do, at 53, to try to get a retirement together. Have two adult children living with my husband and I, and a grandchild. No child support and she had a dissabily. We are desparate for financial guidance. Please respond.

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