With so much of your retirement funds invested in the market these days, the thought of retirement is a risky proposition. I personally don’t have plans to retire anytime soon; however, listening to Bill Hampel, an economist for the Credit Union National Association, speak at the AICPA National Conference on Credit Unions, one take away for me was “how much shock are you willing to take to your portfolio?”. This is something you need to determine up front before you retire. Based on historical data, this can be as much as a 50% hit.
So as you work with your financial planner to determine that timeline when you can retire, keep in mind that the market is volatile. Why do you think that so many people have continually delayed their retirement date? I find it interesting that when you ask someone that is heading towards a “normal” retirement age when they plan to retire, the answer is typically five years.
What is so magical about this FIVE year number? Is it a safe number? Does it appear to keep you vested in the company and not perceived as a short timer? Is it real? Or will it keep getting deferred?
The winners in this downturn of the economy have been the ones that have had the ability to defer their retirement. Not so lucky have been the ones that retired and then saw their nest egg and home values plummet. Until we see a resurgence of the economy we will probably continue to see the retirement age generation pushing out that date FIVE more years.