Retirement and the economic mess

[admin]

The first stage of grief is denial. And all of us have had plenty of that when it comes to the sad state of our financial portfolios since the beginning of 2008. But that's history, we're mad about the economic mess, and what are we going to do about it? We still want to retire, so we'll just have to be more resourceful. Please share with your fellow Topretirements's visitors your fears, thoughts, ideas, rants about how you plan to cope with retirement. All thoughts welcome. Misery loves company, and maybe we'll inspire one another!

Thanks
Boomer1

PS - See related article on how to http://www.topretirements.com/blog/financial/will-your-retirement-weather-the-economic-storm.html/retire and weather the economic storm

[ruth]

I agree that the current economic crisis should make us all be more creative about our retirement. While I am willing to rethink some of my basic assumptions about how and where I live in retirement, I do have a question about my portfolio allocation.

I agree with the opinion that as one enters retirement and gets older that the investment portfolio should be less equities and more fixed income. But since my portfolio is heavily weighted towards equities and I have 5 years to go to retirement - and the market is down 40% - what should I do? I don't want to sell in this environment to re-weight, but will I have enough time before i need the money. Any thoughts welcomed.
thanks from confused in cincinatti

[marty50]

Ruth, you are not alone in your dillemna. I've had all kinds of thoughts ranging from selling everything to doing nothing. This https://personal.vanguard.com/us/VanguardViewsArticlePublic?ArticleJSP=/freshness/News_and_Views/news_ALL_retiringsoon_10312008_ALL.jsp Vanguard article is pretty helpful. Take that advice, sit tight, and more importantly - think hard about what kind of retirement you want, where you want to live it, and who you want to live it with. That is ultimately more important.

[Bea]

Ruth,
I feel your pain! My husband and I have decided to hunker down and wait it out. We have held on this long and we keep thinking it won't go much lower. Maybe that is just wishful thinking, but we are clinging to it pretty tightly! We would take a big loss to sell at this point, and we're gambling that the market will come back.....eventually. Our time frame is not as long as we'd like it to be, but we are hoping it is long enough to recover some of the horrendous paper losses we have incurred.
Good luck with whatever you decide to do.

[madman]

the comments about hunkering down and not panicking all ring true to me. What the wife and i have been talking about is how can we increase our revenue, since we like spending at the rate we currently do. If we don't do that, our retirement portfolio is not going to be enough. Might as well face the music now (and it could be fun anyway). Each of us ought to be able to find a little part-time work in the areas we have experience in. Both of us can write, she can teach on some subjects. Now we need to get busy and find some clients! Either that or become Wal-Mart greeters!

[youngatheart]

this economic downturn has some legs now, the experts are saying it could take a few years to sort itself out. Makes me realize we are all vulnerable once we retire, unless we put everything into CDs or Tbills and resign ourselves to very low returns.

Which leads me to my new conclusion about retirement living - we should be looking for lower cost retirement lifestyles. Maybe find someplace in the Carolinas or Georgia that's not on the coast. Don't spend so much on what we buy and keep some powder dry. And hope like crazy our portfolio gets back to where it was!

[6string]

Yeah, its bad... I was looking at about 7 years to go (59.5 yrs old) and now it is for sure 10 years to at least reach the social security assistance. Working longer is a very difficult option for me, there is so much I want to do while I can still do it. If I or my wife do have to get a part time gig, it will definitely not be working for someone else! Cash jobs, side jobs, maybe even just volunteering (you can't spend much if you are too busy to sign the check!) those kinds of things. I'm an engineer by day, musician by night, my wife is an artist and songwriter, maybe there's a market for us at some touristy, trendy little places - oh we love the beach!

[sid]

The wife and I are already retired and there isn't any possibility of me going back to my former professional life. So even though our 40k got hammered, we have to live off of what is there. That isn't all bad. We cut out a lot of expenses that we thought we "had" to spend, only to find out that a lot of free things (movies, museums, lectures, tennis) are just as much fun when savored. It has brought us together in finding a happy solution instead of either moping or taking our oh so fortunate life for granted.

FYI, there is an interesting article in yesterday's (Feb 8, 2009) NY Times on Plan B. It has to do with the premise of Plan B was it was always a possible dream - maybe the invention or the book that was going to make you rich, or the B & B you were going to enjoy running in Maine. Maybe it would happen, maybe not, but it was fun to think about it. Now Plan B is here, and for most of us it means hunkering down, finding a way to cope and still enjoy life with diminished resources. http://www.nytimes.com/2009/02/08/weekinreview/08segal.html

[topretirementseditor]

As a followup to Sid's comment there is another interesting group of articles about how the recession is affecting retirement in the NY Times today (April 2) in their special retirement section.
This article talks about tax treatment in different states: http://www.nytimes.com/2009/04/02/business/retirementspecial/02relocate.html
This one on going back to school to restart earnings
http://www.nytimes.com/2009/04/02/business/retirementspecial/02reskill.html
here's one on volunteering opp's
http://www.nytimes.com/2009/04/02/business/retirementspecial/02PEACE.html
There are more articles, but they are hard to find unless you know the exact title