Many of us who had investments took a huge hit in the last year or two (401Ks, etc) and people who have mostly cash/CDs/etc are earning very little interest.  So how much has the last 2 years impacted your future retirement plans--has it made it a more distant dream, cut back the level you will be able to live or do you think you'll have time to regroup before you get to that point?

 

 

My DH finally "retired" officially in 2007 but continued to work 3 part time jobs in the summer. At 53, I'm unofficially retired however that doesn't mean our future wasn't impacted. I saw signs of a weakening economy over a year ago and made adjustments to our spending and savings plan. I could have gone out and gotten some part time work if I really felt we needed to add to our income, but the truth is it was easier to cut our spending. My husband strategically planned out our retirement and kept an eye on our investments (but did not obsess about it) because we are in it for the long term.

alexss:

So how much has the last 2 years impacted your future retirement plans--has it made it a more distant dream, cut back the level you will be able to live or do you think you'll have time to regroup before you get to that point?

If you believe that retirement is all about traveling and living between summer cottages and winter residences, then you MAY have to "adjust your expectations". Unfortunately many folks balk at the idea when they hear that concept. Like everything else we've been convinced that retirement is about living large without a care in the world but the reality is far different from most people. Retirement USED TO MEAN a steady income from whatever plan you had and industries who based their businesses income on the American retirement system. Retirement now means you have to budget for basic living expenses and medical before anything else. I think the days of being "continually entertained" at any cost are over. The people who will be most disappointed are the ones that resist adjusting their expectations.

What I've seen is that people who didn't move their investments into cash at the right time are working a while longer than they had anticipated, because the value of their investments took such a hit they have to build back--removing a quarter or a half of and investment's value makes it harder to survive on the income off of it, even if there was no "fancy" retirement planned. 

At this point in time (I'm at least 14-15 years from retirement, and it could be longer, depending) it doesn't really bother me.  My retirement funds are in multiple places - the state retirement program, and some individual programs, mostly in a variety of mutual funds, which are, themselves, comprised of multiple mutual funds.  If the stock market goes up, the shares I own generate more dividends, which are reinvested in more shares; if the stock market goes down, the price of the shares drop, and I buy more shares with the same monthly investment.  If I were closer to retirement, I'd be more concerned about it.  My goal is to be completely debt free, including my house, by the time I retire (I've been in my house for 6 years, and, at this rate, should have it paid off before my retirement date) - that will cut my need for retirement income significantly, if my only regular housing expenses are utilties, insurance, and taxes.  The earliest I could retire is at 55, which would be 28 years of service; I would be 57 when I reach 30 years of service.  Because of aspects of the state retirement program, working more than 33 years or so actually cuts your benefits somewhat - so I'll continue to work, either as a substitute teacher (choose your own working days) or in something that will reactivate my social security benefits so I can draw that as well (assuming it's still there when I retire) - a bookstore would be fun... but I wouldn't have any money left!

I'm 49 and my husband is 53.  We plan on working until full SS retirement age.  I will have a state pension (all going well).  However, my DH works as an outside consultant and took a big hit from the drop in the stock market.  We plan on doing as a previous poster said, continuing to buy (dollar cost averaging).  The sale of our home will also constitute a large part of our retirement income as we plan on moving to cheaper housing & use the proceeds for an annuity or some other kind of investment.   Neither of us envision a "fancy retirement" either.  We just want to volunteer, plant a garden & enjoy family.  However, I will say the drop in investments took away some choices re: whether or not we will be working until full retirement.  I also have some anxiety re: whether DH will be able to continue to do what he does for a living until retirement age.

I assume that I will work until I die.  I don't expect there to be a Social Security Adminstration by the time I can retire (36 right now) so I don't count on a SS check. DH & I both have 401K and just have to hope that will do better in the future.  I will have State retirement funds. I see us living in our basement eating out of one peanut butter jar with two spoons, waiting to die----not really, but it probably is the sad truth for some older people. Just have to hope that DD is a rocket scientist who still loves her old parents and will help them along if they need it.  I know I would do anything I could to help my parents and in-laws if they needed it.

I totally agree with you Whitney! I think retirement will not be an option as long as we are the least bit healthy. Unfortunately, dh think his 401k will be enough for us (he still just doesn't get it). It took a hard hit but at least we still have one. I am still trying to get him to see we need to put money away but it's not going well. I saw a bumper sticker that says "Be nice to your kids, they decide what nursing home you go in". If people only realized how true that is. Here's hoping my sons become doctors!

alexss:

So how much has the last 2 years impacted your future retirement plans--has it made it a more distant dream, cut back the level you will be able to live or do you think you'll have time to regroup before you get to that point?

 

 

I think we'll have time to regroup, assuming I don't get sick or injured. I found a job that pays almost as much as the retirement income and we're saving most of that "extra" income, realizing that the income from the current job is going to be temporary. It is contract work and there are no benefits, which we don't need since we already have medical/prescription coverage from the job I retired from. The retirement plan I'm under is no longer available - they stopped offering it in the early 1980's - so in a way I feel like I won the lottery. While we'll never be wealthy, we'll never be using two spoons to eat out of one jar of peanut butter either.

But unlike some relatives who are only now realizing how serious their situation is, we've lived within our means and never took the expensive trips, cruises and pricey restaurant dinners that they did. One of them recently had the audacity to ask us for a loan so they wouldn't lose their house to foreclosure! I declined, but was tempted to say "Well, dummy, you should have thought about that while you were lying on the beach in Hawaii!"

 Both DH and I were born to older parents and taught us the real meaning of the Social Security funds -- their original purpose was supposed to be the icing on the cake, to make up for any changes.  It was NOT to be the whole enchilada.  We have never nor will we ever count on that to be our all in all.  That is just pure foolishness. 

 We have our monies spread out and meet with our investment man often.  It can be frightening at times if we look at individual statements because we are of the age where some of our investing is more risky but looking at the whole picture nothing has really changed that much.   As we get approach retirement we will become more conservative in our investments but barring some unforseen tragedy we don't anticipate anything outside the parameters of our original plan. 

we have retirement funds. not enough but we save a bit each month. I have it going into a conservative fund.  so at least I didn't lose much.

hopefully we can save more when the kids are older and I can work more.   we hopefully will have cpp and ssi but I see us being active and working a bit. 

I don't know for sure because I don't know what the future will bring and since it is constantly surprising us...we didn't see that in the last 7 years since being pregnant with my first dd. that  dh would lose his job just when we bought a new house, that it would be a year until a new job as reduced pay,  fil cancer over the last few years, my parents separation with the uglyness of my dad. mil health.   having homestay so being parents of a teenager too!

so just plugging along and trying to do the right thing.  saving a little,  have life insurance on each other and on our debt.