Lost retirement?

Some of the experts and academics out there lament the disaster that has befallen retirees and those near retirement. The crisis of 2020 has destroyed retirement assets, retirees will fall into poverty.

Really?

Not if you were prudent with your investments, allocated assets appropriately for your age and stayed the course during market gyrations.

My 401k is at an all time high as of June 5, 2020. It has retuned 2.84% year to date (there have been no contributions in over ten years). Two stocks I own have continued to pay dividends. My municipal bond mutual funds have continued to pay tax-free interest each month.

If you were several years from retirement the market crash was a great investing opportunity and certainly not a signal to sell investments.

The economic crisis of 2020 is temporary. It may take many months, perhaps a few years to fully recover, but it’s temporary nevertheless. In addition, keep in mind that even if you are retired and your investments took a hit, you are not likely to use more than 4% of those assets in any given year if you follow the widely accepted withdrawal strategy.

2 comments

  1. I have not done anywhere near as good as you two gentlemen have, but I am only down about 5% from our all-time high. I do not consider that outlandish, nor catastrophic. The people who had problems were those who panicked and sold when the market was tanking. I still remember, and adhere to, one piece of advice I received a while ago – selling when the market goes down only locks in your losses.

    Liked by 1 person

  2. I totally agree. I am currently only down -1.4% and I am not worried. My low so far this year was -19%. As a reference, the Dow hit -34.9% on March 23, 2020 and is only down -5% currently. I stayed the course and it is coming back. Only if you panic sold did you lose.

    I lived through the Saving & Loan crisis late 80’s, the tech crash of the late 90’s, 9/11, the housing/banking crash, and now this government made crisis of killing the economy. Yes, the people who lost their jobs will have a set back. Those who are having problems close to or are retired cannot blame it only one event. They have to look at what they were doing the last 30-40 years that put them behind for retirement. I suspect that it is not a case of putting all the eggs in one basket but not putting in any eggs in the basket.

    Like

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