How to Salvage Retirement Plans Los Angeles Times (04/09/01) Vol. 105, No. 14 p.U5; Kristof, Kathy M.
Many Americans who were planning on retiring in a few years
have had their hopes dashed, as the stock market continues to wreck
havoc on investor's portfolios. The bad news, however, is that there is
no guarantee the stock market is near bottom--and a repeat of the 20
percent to 30 percent annual returns of the late 1990s is highly
unlikely, according to many experts. For those looking to get their
retirement back on track, there are three main strategies: delay the
retirement date, save more now, and plan to spend less later. Delaying
your retirement date not only provides for higher savings, but also
increases one's social security benefits and payment from workplace
defined-benefit pension plans. "Saving more now" is a strategy that can
help investors in two ways: it increases the money you will retire with,
and it conditions you to live more modestly--a useful skill in
retirement. As far as spending less later, this does not necessarily
mean that a retiree must abandon future retirement plans altogether.
However, now that the market is in a swoon, careful planning on the big
things--remodeling projects, vacations, and second homes--should be
given careful consideration.