Reply to My issue with stock market bubble fears

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[quote=Anonymous][quote=Anonymous]
But if you’re Gen X don’t you still have time?   And haven’t you been benefiting from the strong bull market in recent years?[/quote]

You might think so, but imagine getting laid off when you’re 59 1/2 years old (the oldest GenXers are 60 years old right now by the way). You’re not old enough to claim Social Security yet, so you have no income. So you start tapping into your 401(k) because that’s what it’s there for — to pay for your retirement. But because the stock market has also crashed, you’re eating into your principal instead of living off your interest. So that means you don’t  have the same amount of principal in the market to benefit from a recovery. So you have a lot less money than you had planned to retire on down the road. Eating into your principal right at the start of your retirement is a bad financial scenario, especially if you didn’t have a large nest egg to begin with (and the majority of people with 401(k)s don’t have $1 million in them, it’s  nowhere near close).

This is not the scenario that all the investment books talk to you about, but it is a very common fear for your average working person who doesn’t make a lot of money. And in this economy, this scenario is feeling more likely. Some of my friends are facing early layoffs before age 62 and are having a very hard time finding work again. [/quote]

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