What, Me Worry?
I���M IN THE HABIT of checking my investments every day. Since I consolidated them into one Fidelity Investments��� account, it���s easy to see the impact of market movements on everything I own. I don���t depend on my investments for income, but it still shakes me up when I see big drops, especially several days in a row.
If market gyrations affect me, what must they do to retirees who depend heavily on their investments for income? I posed that question on a retirement planning Facebook group: ���If you are now retired or very close to retiring, have the recent stock market gyrations plus inflation shaken your confidence in your retirement financial plan?���
To my surprise, only a handful of responses showed any concern. Most folks displayed remarkable confidence: ���Our plan accounts for all this.��� ���Our plan is solid.��� ���Our plan is pretty well protected against market and inflation risk.��� ���Market correction is expected and planned. My portfolio is fully diversified.��� ���No. One quarter of poor stock market performance following the best year in ages and several strong years in a row does not shake my confidence in the least.���
Perhaps I���m the one who is too fiscally conservative. But I���m also thinking these folks, who take the time to discuss retirement issues on Facebook, aren���t typical.
There���s another world out there, those Americans with little or no investments to worry about and for whom inflation is a far greater concern than what the S&P 500 does next week. Only slightly more than half of Americans own stocks, including in retirement plans.
Rick Delaney, chairman of the Senior Citizen League, which is lobbying for a onetime $1,400 check for seniors, says the group has heard from thousands of seniors who have ���exhausted their retirement savings, started eating only one meal a day, started cutting their pills in half because they can���t afford prescription drugs. [These are] just a few of the drastic steps so many have had to take because of what inflation has done to them.���
What���s the truth? Research looking at the impact of inflation found that Americans age 65 and older were affected the least. Because of inflation, seniors find themselves spending an additional $194 per month, while those ages 45 to 54 were spending $305 more. Still, if you���re living mostly on Social Security, having to spend an extra $194 can be a big hit.
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