I Was Planning to Retire in 2009 – Now What?

by Stacy Francis, CFP®, CDFA

For years, I would run into the same neighbor every time I went down to the corner shop – an incredibly dedicated and brilliant science teacher called Matt. For years, that is, until he realized his dream of retiring and buying a ranch in Utah last fall, leaving his wife behind for a couple of years until the time would come for her, too, to stop working. So you can imagine my surprise when I ran into him once more – last week! When my mouth fell open, he explained that he was substitute teaching for a couple of months. The value of his nest egg was so much lower now, complementing his investment income had become a necessity.

This may seem tragic, but the truth is that many people on the verge of retirement now find themselves with significantly smaller nest eggs. And unfortunately, there is no magic way to undo the damage. Instead, most near-retired people are faced with some harsh choices: a leaner lifestyle or a few more years in the workforce. Of course, the best solution for you may be a combination of the two, like working part-time for a while and settling for a less extravagant lifestyle, at least until the storm is over. The most important is that you do not:

  1. Cease to add to your nest egg because the value has fallen off. You will need that money - now more than ever.
  2. Shift your investment strategy away from your ideal asset allocation, in favor of all income-generating securities. Yields on the latter are pretty much insignificant at this time, while the downside for mutual funds invested in stocks is significantly smaller now than it was, say, a year ago. If anything, you should be doing the opposite!
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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.