Preserving Retirement Savings in Perilous Times

Sep 15th, 2008 | By | Category: Senior Moments Blog

It’s September, 2008 and we Baby Boomers are having our first experience trying to deal with living on a fixed income as we watch our retirement savings spiral downward.  The anxiety resulting from the fear of running out of money is palpable.  We would do well to sit back with a cup of calming tea and review what the investment sages say about preserving retirement savings.

·         Don’t ever leave your investment manager out of decisions you make about spending large sums of money.  Our investment broker happens to be a family member, and we frequently kid him about consulting him on every decision we make, except groceries and gas.  That’s an obvious exaggeration, but the reality is that any major purchase needs to be considered thoughtfully and with good counsel from trusted professionals.

·         Be sure your investment portfolio is diversified.  That is it needs to be spread over domestic as well as foreign funds; large, medium and small companies; stocks, bonds, CDs, mutual funds and treasury notes are the most common varieties of investments available.  And having cash on hand is always a good plan.  The percentages of your investment in each of these categories need to be determined in consultation with your investment manager and dependent upon the level of risk with which you are comfortable. 

·         Don’t carry balances higher than the guaranteed amount (usually $100,000) in any single account in a banking institution in the United States.  The FDIC (Federal Deposit Insurance Corporation) guarantees money up to the specified amount.  Beyond that, should the bank fail, you only get a partial return of your funds.  What options do you have?  Move funds to another banking institution or several others if you have that much uninvested cash.   Or, if you want to leave all your cash in one bank, talk with your banker about options for multiple accounts, usually with different and multiple owners or beneficiaries (differing names on accounts).  An excellent discussion of this issue can be found in the Wall Street Journal, an article by Jane Kim at

·         Stay in close touch with your investment manager.  Be an active partner in making decisions about your portfolio.  Stay current with trends in the stock market, realizing you don’t understand it fully, but nevertheless trying to respond appropriately to its volatility.  You are the only person who can define the level of risk you can handle.

The talking heads in the financial world predict 1000 bank closures before the current recession is over.  Be prepared for the impact that crisis will have on your life.

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