Reply to What do people do when a serious downturn happens 5 years or so before retirement?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]What do people do when a serious downturn happens 5 years or so before retirement?

I feel like people are becoming more and more aggressive investing in equities and even when people "diversify" when closer to retirement they are still heavily invested in equities.

So say you are retiring in 5 years and you don't have the multiple millions that the standard user on this forum has, what steps do take to recover financially?[/quote]

When you’re that close to retirement, you should have essentially nothing in the stock market.

Unless you’re my FIL. But if you were, you’d be an idiot. [/quote]

I’m not so sure about that. Unless you are planning to annuitize the money, which is usually a bad deal.

My life expectancy is about 90 years, give or take 5 years. So if I retire at 65, I will have 20-30 years of retirement. If I take it all out of the stock market at 60, then I am missing out on up to 35 years of gains. That’s actually pretty devastating.

If you are 65, have a house paid for, kids launched, and a steady income stream, there is absolutely no good reason to take all of your money out of the stock market if you expect to live beyond 70. [/quote]

I am the PP that said that our house will be paid off, it is true our kids will be launched as well. And we both have decent fed pensions and maxed SS that will easily cover our expenses.  We have a financial planner that is managing our retirement investments.

If all goes according to plan we will have a great retirement and leave something to our kids.  If the stock market has a big downturn (meaning “not to plan”) we can weather it and be fine.[/quote]

You probably won't be affected but future fed with a pension will absolutely with 100% certainty have to take a massive cut on their pension when we finally hit a point of no return with our national debt. [/quote]

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