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In 2009, I was talking to my 65 year old Dentist and asked him when he planned to retire. He said that due to an aggressive approach to investment he was 70% in stocks and the market crash and poor investment advice would cause him to wait until well into his seventies. He lost about 40% of his portfolio in the crash.
He told me that he would have loved to retire but wanted to wait until he got his money back or wait until 70 so he could get his full Social Security. I looked him up recently and he died a few weeks after his 70s birthday. He never got that Social Security and dream retirement.
The exact day I plan to retire very much will depend on stock market results in the next 10 years.
Anyone here, forced to keep working because of the stock market?
I don't know what your dentist did as I lost about the same amount in 2009, but recovered it all and then some by the time I retired at the end of 2013. Had it not recovered it might have affected my retirement date, but more likely we'd have made a lifestyle change. It did help that we were above our goal in 2009 so it didn't take as much to exceed it again (I think we went above our goal 2 times between 2009 and 2013).
The Trainer,
IMHO, a person near retirement age who invests heavily in stock, does not have a portfolio big enough or a guarantee source of stable income to maintain desired standard of living like your dentist can not afford to retire at any time regardless of the market condition. It is a well-known or 'elementary' fact that stocks can give higher yield than bonds or stable income but very volatile.
Being a number person, I searched for the stats or study of how the 2008-2009 crash affect retirement decision and found this one
Abstract
This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average wealth loss between July 2008 and May/June 2009 is associated with an increase in planned retirement age of approximately 2.5 months. Furthermore, pessimism about future stock market returns is found to amplify the impact of wealth losses on retirement timing.
So it appears that the 2008 crash had some impact on retirement timing but quite short. I consider 2.5 months not being very significant. Of course this is the 'average' number which represents the average investor and not the hyperaggressive investors.
The problem is probably in the area of poor advice and not spending enough time on his part to understand the financial side of retirement. This is a problem most of us could have. If we do not educate ourselves in retirement finances we may not be able to identify poor advice or maybe recognize good advice.
I would say about 5 years before retirement he should have started to build up a couple of years spending in cash and made sure his investments would help meed future cash flow needs.
The status of the market should not matter as he should not have to be selling securities to support the first few years of retirement.
NO! I was able to retire as soon as I turned 55 just like I was promised, and planned to do so from the day I started 30 years previous. I have a defined benefit pension, a REAL pension that actually allows people to retire comfortably!
Pensions are only good until the company supplying the pension runs out of money. It has been known to happen.
And I do feel bad for the dentist. His timing was off by that 5 yrs, through no fault of his own. Most people were blindsided by the 'crash' and could not have prepared. That 2.5 months simply averages the effects of those reaching 65 in the worst part of the cycle with those who were not retiring for 2-5 more years. However, never being able to 'get back' from social security is not catastrophic, except psychologically.
Well, I got out of the market before the crash and 18 months before I lost my job at 67-1/2. I'd had some nice gains, was getting nervous because Jan 2008 stock market wasn't beginning well, slowly drifting down. Started taping FastMoney. Would watch at night after work. I will NEVER forget two tech analysts on that show - Carter Worth and Louise Yamada - both are still my "heroes" - who predicted that very severe debacle with frightening charts - a true doomsday scenario. Both were on either the same night or two nights running. Scared the heck out of me. I immediately sold everything and went to cash - and meanwhile the market tanked that entire year. Of course, I wasn't courageous enough to get back in at the bottom, so bought 5% CD's instead. Anyway, I came out all right - all because I followed my gut and watched a TV show. Who knew???
Today, I'm back in the market 20% cash, 38% invested aggressively, rest pretty conservative investments. I expect to live another 20 years and don't think it's smart not to stay invested. I will say because of the 2008 experience, I have learned to take profits, keep enough cash to ride out the bad times, and do pay close attention to some of the wiser gurus.
Last edited by Ariadne22; 09-16-2015 at 12:37 PM..
In 2009, I was talking to my 65 year old Dentist and asked him when he planned to retire. He said that due to an aggressive approach to investment he was 70% in stocks and the market crash and poor investment advice would cause him to wait until well into his seventies. He lost about 40% of his portfolio in the crash.
He told me that he would have loved to retire but wanted to wait until he got his money back or wait until 70 so he could get his full Social Security. I looked him up recently and he died a few weeks after his 70s birthday. He never got that Social Security and dream retirement.
The exact day I plan to retire very much will depend on stock market results in the next 10 years.
Anyone here, forced to keep working because of the stock market?
No but this is a terrible situation that you don't want to happen to you
I retired in august the week of the start of the plunge. It has not been a blip on the radar as far as retirement , after all why should it?.
If you retirement was effected than you had a poor structure in place. Only money you won't need to eat with for quite a few years should be in equities.
I run 40-50% equity's with the rest in cash and bonds. We started out with 2 years of withdrawals in cash and can continue you for years on the bonds.
A good plan should leave time for markets to cycle.
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