Planning for Retirement
From the Late Summer '03
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: What Now? Retirement Planning for Uncertain Times
The
recent downturn in the market has befuddled even the most fiscally savvy in
regards to their retirement planning. Should you continue to invest in the
market or simply stuff all of your money in the mattress? A legitimate question
considering that more than $530 billion in American retirement savings has been
lost during the past three years, according to the Federal Reserve Board.
Not to worry, however. This is all part of the ebb and flow of the market.
“We’ve had 29 bear markets and the market has recovered 100 percent of its value
and moved on to new highs all 29 times,” states Ben Hartman, a CFP and an
Investment Representative at Edward Jones.
Also part of the glass-is-half-full club, Len Hale CLU, CHFC, LUTCF for New York
Life states, “The stock market has been on sale for the past three years.” Low
stock prices allow potential investors to snap up stocks for less. Don’t buy
simply because it’s “on sale” – only a qualified financial advisor can help you
select low-cost stocks that are likely to regain value and grow, and assist you
in selecting other funds and savings instruments that will lead to a financially
healthy retirement.
Furthermore, Hartman advises: 1. Buy quality investments. 2. Invest often. 3.
Stay the course. And how much does one really need to retire?
“If a person needs $50K a year of income,” says Hale, “they’d better have close
to a half a million so that between the retirement account and social security
they can replace at least 80 percent of pre-retirement income.”
CNBC’s Karen Hube reported that many planners recommend a “three-pot retirement
income engine.” One “pot” is for cash expenses expected in the next year, one
for fixed investments to feed the first pot and one for stocks that will provide
growth to feed the first two pots. The concept is that as cash flow diminishes,
it can be replaced with excess from the other two pots.
Whatever your method – stocks, bonds or pots – there are better places than your
mattress to stash your money and watch it grow.
The
recent downturn in the market has befuddled even the most fiscally savvy in
regards to their retirement planning. Should you continue to invest in the
market or simply stuff all of your money in the mattress? A legitimate question
considering that more than $530 billion in American retirement savings has been
lost during the past three years, according to the Federal Reserve Board.
