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Retirement Planning: Shaken and Stirred Retirement Plans February 9, 2009

Posted by retirementwithaplan in Uncategorized.

The ideal of living on a beach with a cold drink in one hand while you watch the surf in retirement has been severely shaken by the recession we’re in. Some people even wondered if this is the start 020908grtdprsnof a second Great Depression as they saw their stock portfolios lose between 30 to 40% of their worth in a few short weeks. Money that was being counted on simply disappeared. This was at the very start of a massive wave of baby boomers getting set to retire, too, and now all bets are off. If you are one of the many people who were impacted, you’re probably wondering if you can ever retire, and if so, how?

Reduce Your Risk If You Are Close To Retirement

One thing is certain; it all depends on exactly how close you are to retirement on what strategy makes more sense for your money. Everyone is going to have to re-evaluate their retirement plans, but those closer to retirement have to reduce their risk to outside market forces the most. They can’t count on outside income from jobs anymore, after retirement, and they won’t have time to appreciate investments to make up the difference and ride out the market chaos. So, they must seek to reduce their risks immediately, if they are close to retirement and save their nest eggs, in case things get much worse. And, unfortunately, it can mean making the decision to delay retirement to make up for their losses too.

Greater Chaos Means Some Opportunity

For those that still have several decades before they actually retire, the market chaos can provide some great opportunities to fatten their portfolios by buying while prices are low. However, the worry has been that we are going into a depression and what investments are sound? There are still some out there, and there is also a great interest in commodities like gold, which rise historically in a depression. So, it’s a good time to get into precious metals, some low priced value stocks, and also, it may be a great time to buy housing as prices have fallen dramatically.

Thanks Melissa for the guest post.



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