Majority of people plan for retirement in the wrong way on clarkhoward.com

So often, Clark gives general "one size fits all" advice about your retirement savings. But FinancialEngines.com can be used to analyze your specific situation. This website takes a very granular look at your retirement plan. Using Monte Carlo simulation, it generates a worst case, best case and intermediate case scenario for your money down the road.

Meanwhile, FinancialEngines.com recently surveyed 1 million people to get a better idea of how we're planning for retirement. Unfortunately, 70% of us have our money fouled up in a 401(k) plan with too little or too much risk.

In addition, some 40% of us have huge money tied up in employer stock. Clark says that should be more like zero percent! But people trust the company they work for and take the path of least resistance when making investment decisions. The downside is there's great risk having all your eggs in one basket. If you think not investing in your company stock is disloyal, throw them 10% at the most and call it a day.

Diversification is the key. You have to spread your money out to lower your risk. A lot of people make the mistake of taking all their money and putting it into a stable fund or a guaranteed fund. Those options may sound like a sure thing, but they basically tread water.

Clark prefers that you have money in the Total Stock Market Index, where you own pieces of thousands of companies. Sure, it's not as "sexy" as putting it all into a single company and letting it ride. But investments should be about long-term security, not the dazzle factor.

What others are saying

USAA Insurance
Clark
On your program recently you were talking with a retired military person and I think you told him that since he was already retired, you cuoldn't get coverage with USAA. If that's what you said and think, I think you need to do some research. If he's retired, I'm pretty sure he can use USAA as a resource for all of his insurance needs. USAA may have restrictions if a veteran applies for insurance (i.e., an enlistee), but I think they would accept even them. My father was an USAA client and because I was his dependent, I'm able to get insurance etc through USAA. My children are also able to get their coverage through USAA through the "lineage" without having had any direct military relationship. I think you should be telling anyone with prior military service of any kind to check with USAA before seeking other insurance coverage. If you want/need to reply to me I'm at helenhofer@gmail.com
By Helen Hofer @ 06/09/08 01:10:27 PMreport abuse
long term security
You need to address the already retired too. We have no time for long-term.
By Marilyn @ 06/08/08 12:09:57 PMreport abuse
roth income limits
Is it true that in 2010, you will be able to transfer your IRAs into a Roth without any income limits in place.
By john annick @ 06/06/08 03:48:26 PMreport abuse
roth
i am 53 years and now able to put into roth ira i do not work my husband is retired yearly income 70,000.00 this is the first time we are able to do this never invested in anything. how do we get started HELP'
By ms. jackson @ 06/04/08 06:14:48 PMreport abuse
Asset Allocation
Investing all of one's money in the Total Stock Market Index is a mistake for most people. Funds should be allocated across a mix of stock (and within stock, large and small cap, domestic and international, growth and value), bonds, cash, and alternative investments (commodities, real estate, currency etc.), with the percentage in each based on one's years until retirement and risk tolerance. Nowadays there are mutual funds, along with other vehicles for higher net worth investors, which can enable easy investment in all of these asset classes.
By Alan Weber @ 06/04/08 08:31:35 AMreport abuse
Planning For Retirement Free (I wrote the software)
My company has recently released software (http://www.planwithvoyant.com), free of to use for non-financial professionals, to help one visualize their personal financial "big picture". A quick 5 minute plan can be created, or a more sophisticated plan that uses Monte Carlo or historical simulations can be used to test how resilient your financial strategy, whether be to pay for retirement or your kids college, is to market forces.

You can see the demo of the software

http://www.demo.com/demonstrators/demo2008/124779.html

There's no catch for consumers. It's free.

http://www.planwithvoyant.com
By Skip Walker @ 06/02/08 07:36:30 PMreport abuse
Planning for Retirement-Free (i used it)
One education site I used years ago that has great online self paced training
https://personal.vanguard.com/us/planningeducation/education
Yes, it is Vanguard mutual fund company,, but here the investors own the company.
(last post, I promise)
By DT @ 06/02/08 06:35:08 PMreport abuse
Financial Engines .com
These folks are very expensive. You can get free advice from https://personal.vanguard.com/us/HomepageOverview and other sites. I disagree with paying for this sort of advice unless you have more money than you need.
AAII at http://www.aaii.com/ has low cost advice that is proven to be balanced and low cost...under $30 per year.
By DT @ 06/02/08 06:25:48 PMreport abuse
This costs $40 every 3 months
Clark, isn't there a free website that I can put my mutual funds and amounts in, and have them forecast future value based on past performance?
By Steve @ 06/02/08 04:03:06 PMreport abuse
This isn't free...might be worthy of mentioning
Financial Engines is not free, so keep in mind before using this company.
By Omar @ 06/02/08 03:56:53 PMreport abuse
What about International Mutual Funds
Total stock market index is not enough. Mutual funds with international (EU,emerging markets) stocks (maybe upto 40%) should be part of the mix. (50% of capatalism is overseas these days).
By Kales @ 05/21/08 07:07:20 AMreport abuse

USAA Insurance

Clark
On your program recently you were talking with a retired military person and I think you told him that since he was already retired, you cuoldn't get coverage with USAA. If that's what you said and think, I think you need to do some research. If he's retired, I'm pretty sure he can use USAA as a resource for all of his insurance needs. USAA may have restrictions if a veteran applies for insurance (i.e., an enlistee), but I think they would accept even them. My father was an USAA client and because I was his dependent, I'm able to get insurance etc through USAA. My children are also able to get their coverage through USAA through the "lineage" without having had any direct military relationship. I think you should be telling anyone with prior military service of any kind to check with USAA before seeking other insurance coverage. If you want/need to reply to me I'm at helenhofer@gmail.com

By Helen Hofer @ 06/09/08 01:10:27 PMreport abuse

long term security

You need to address the already retired too. We have no time for long-term.

By Marilyn @ 06/08/08 12:09:57 PMreport abuse

roth income limits

Is it true that in 2010, you will be able to transfer your IRAs into a Roth without any income limits in place.

By john annick @ 06/06/08 03:48:26 PMreport abuse

roth

i am 53 years and now able to put into roth ira i do not work my husband is retired yearly income 70,000.00 this is the first time we are able to do this never invested in anything. how do we get started HELP'

By ms. jackson @ 06/04/08 06:14:48 PMreport abuse

Asset Allocation

Investing all of one's money in the Total Stock Market Index is a mistake for most people. Funds should be allocated across a mix of stock (and within stock, large and small cap, domestic and international, growth and value), bonds, cash, and alternative investments (commodities, real estate, currency etc.), with the percentage in each based on one's years until retirement and risk tolerance. Nowadays there are mutual funds, along with other vehicles for higher net worth investors, which can enable easy investment in all of these asset classes.

By Alan Weber @ 06/04/08 08:31:35 AMreport abuse

Planning For Retirement Free (I wrote the software)

My company has recently released software (http://www.planwithvoyant.com), free of to use for non-financial professionals, to help one visualize their personal financial "big picture". A quick 5 minute plan can be created, or a more sophisticated plan that uses Monte Carlo or historical simulations can be used to test how resilient your financial strategy, whether be to pay for retirement or your kids college, is to market forces.

You can see the demo of the software

http://www.demo.com/demonstrators/demo2008/124779.html

There's no catch for consumers. It's free.

http://www.planwithvoyant.com

By Skip Walker @ 06/02/08 07:36:30 PMreport abuse

Planning for Retirement-Free (i used it)

One education site I used years ago that has great online self paced training
https://personal.vanguard.com/us/planningeducation/education
Yes, it is Vanguard mutual fund company,, but here the investors own the company.
(last post, I promise)

By DT @ 06/02/08 06:35:08 PMreport abuse

Financial Engines .com

These folks are very expensive. You can get free advice from https://personal.vanguard.com/us/HomepageOverview and other sites. I disagree with paying for this sort of advice unless you have more money than you need.
AAII at http://www.aaii.com/ has low cost advice that is proven to be balanced and low cost...under $30 per year.

By DT @ 06/02/08 06:25:48 PMreport abuse

This costs $40 every 3 months

Clark, isn't there a free website that I can put my mutual funds and amounts in, and have them forecast future value based on past performance?

By Steve @ 06/02/08 04:03:06 PMreport abuse

This isn't free...might be worthy of mentioning

Financial Engines is not free, so keep in mind before using this company.

By Omar @ 06/02/08 03:56:53 PMreport abuse

What about International Mutual Funds

Total stock market index is not enough. Mutual funds with international (EU,emerging markets) stocks (maybe upto 40%) should be part of the mix. (50% of capatalism is overseas these days).

By Kales @ 05/21/08 07:07:20 AMreport abuse

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May 19, 2008 -- Majority of people plan for retirement in the wrong way

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