Are there not different investment options within the SEP?

I would think there would be something like a money market account at least, if you felt the need to be safe and was happy with whatever interest it paid.

You might ask at The Household Finance Forum

hth.

Sue

Yes, you should always put money away for retirement, at least up to the limit that the IRS allows for lowering your income for tax purposes.

The big question is not "Should I", It's "Where to put it". In these times, the game is to not to get the highest return on your savings/investments...it's to keep what you already have, even if it means getting lower returns.

This is the question of the century! I can only say what I would do. I would continue. It will lower your taxable income and you would be buying when stocks are low..."buy low, sell high". I am 63 and going to retire in July. I am still contributing and intend on doing so even after I retire. I am hoping that I will be able to recoup some of my losses before I will need to withdraw them in about 5-7 years.

But the best advice is do what you feel comfortable doing. If continuing will keep you awake nights, don't. You can always put that money in a high yield savings account or a CD.

Susan

A retirement account does not have to be invested in stocks. You can open a new account or contribute to an old one and out your money into CDs, high yield savings, Ginnie Mae, money market funds, whatever you want. All perfectly safe.

But yes, do make your contribution.

Check out a big company like Vanguard, call them and ask what you can put money into that will be safe. They won't try to sell you anything iffy.

Go to your bank--you can open a regular bank account as your SEP.

I personally don't believe in the premise of save now, pay taxes later. Taxes never go down, but they DO go up--and right now they're going up A LOT. I firmly believe that by the time most of us get around to retrieving that money, it's going to be taxed at astronomical rates. Aside from that, are you aware that the Congress has SEVERAL times in the past decade discussed having people with independent retirement savings USE UP THAT MONEY before they'll be allowed to apply for SS? Hasn't passed, but you're only 50.... Lastest thing is the government is talking about nationalizing retirement accounts to 'protect' them--do you really think that's their motive? or to have them available to dip into?

Now all that being said, I do have a SEP, also--because of some rather large proceeds from a hobby some years back. It, too, has lost half it's value in the past year. BUT I haven't lost a penny. Why? Because I bought that SEP with money I'd have had to pay in taxes, had I not put it there. So it was play money to start with--and that's really the only money anyone should put into an account that they don't have 100% control of, IMO. Even if the fund goes belly up--I won't have lost anything, since I wouldn't have had that money in my pocket anyway.

Now, what you do is totally up to you. I prefer to pay taxes on what I earn, and then invest it as I see fit, moving it from here to there as needed. Granted, I haven't become rich yet--but on the other hand, I've been a SAHM/W for the past 28 years, and have amassed enough savings in my name (not our marital money, my 'pin' money) to buy our retirement home (a larger house than we have now, on a bigger property), and pay the mortgage on it for several years, as it's a second home for us at the moment. Not bad for a woman who hasn't worked fulltime in almost 3 decades. I'm not posting that to pat myself on the back, but to emphasize that ANYONE can care for and grow their money, if they want to.

I just think it's so important to retain and exercise control over all one's money--even keeping some money separate from their husband's. No one is going to care for and grow your money as effectively as you yourself will.

Do you expect to retire right soon (within 5 - 7 years) ... and have a fairly small amount of dollar-denominated assets in your tax-deferred retirement account?

Do you expect to probably die before age 60 - 65 - 70?

That is - do you have a short-term time horizon for your retirement system to complete its business for you?

I figure that I should figure on financing my retirement till age 100 or so: prefer to run out of days before I run out of money rather than the other way around!

Does the idea of having the current value of your assets fluctuate somewhat set you to chewing fingernails/not sleeping well nights/being too crabby to live with?

Do you like to get a genuine bargain, e.g. a real discount of, say, 40%?

Stocks are on sale, lower price relatively now than for many years.

They may be on fire sale later, who knows which way the market will go over the short term? But over the long term, stocks have done about the best of any investment vehicle ... and you have, what ... a 30 year time horizon? 40 years? Even up to 50?

But I`ve been buying, periodically, and expect to continue to do so ... getting to the airport to see my flight pulling on to the tarmac (or taking off) isn't my idea of a good way to travel.

See my fuller suggestions over on the "Retirement" forum.

Good wishes for making current choices that'll please you in 10 years, that you'll be happy with, then.

ole joyful

P.S. Memo to Canadians ... most financial advisors say that *everyone* should have RRSPs.

I say that they may be useful in some situations ... but were I able to buy them now (at 80, I've not been able to for over 10 years: I'm required to remove certain minimum amounts annually now, with the percentage rising annually till 20% at age 90 and beyond), I'd be following a different path for all but dollar-denominated (i.e. guaranteed dollar) assets. On my death, they get all added into income in that year ... and taxed at top rate: no, thanks!

There are some substantial tax reductions and deferrals available when buying equities with after-tax money that one loses entirely if one puts them into an RRSP.

In low tax brackets back then ... I saved about 26% tax going in ... with higher income now, am paying about 37% now as I take the money out.

Again ... no, thanks! But I don't have an option!

Well, yes, I do - but I'm not sure that I want to follow it, big time.

o j

What are you hearing from the pros about this...

I'm not sure I would trust the "pros" at this point. I don't think they know what's going to happen any more than you or I do. It's a guessing game---

Just my two cents.

You haven't really lost any money unless you've taken it out. If you keep contributing you're buying it at a reduced price and when the market comes back up you will make a lot of money. I'm not an expert, though. If I wasn't saving for this upcoming trip and then getting the rest of the way out of debt I would be contributing to mine.

I think this is the best time to contribute! Stocks are on sale. I put 37% of my pay into a Roth 401K and 12% of my pay into a Roth IRA every year. I have lost about 50%. I have not changed my allocations. I have a fee only financial planner. A few months back I called and told him I couldn't take the market dropping any longer and I wanted out. He told me that would be a huge mistake. Selling in a down market and not contributing new money is not a good idea.
I'm sitting tight and waiting for the recovery.
Donna