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.

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