Hard Times Wreak Havoc On Retirements

CBS Evening News: Nation's Financial Crisis Making It Harder For Retirees To Ease Into Golden Years

(CBS)  The AARP says the nation's current financial crisis poses an unprecedented threat to the well-being of older Americans, reports CBS News correspondent Michelle Miller.

At 63, Marian Rivman was semi-retired with plans to spend the next phase of her life re-living her globe-trotting youth.

"I traveled the long way home from the Peace Corps in the '60s," she recalled.

Now those plans are on hold, after the stock market's nosedive put a huge dent in her retirement savings - Rivman estimates she's lost around 20 percent from its height.

Now she's back in the workforce, reprising her old job as a marketing specialist.

"I've put the word out that I'm not doing work for fun, I'm doing work for real and clients are beginning to come."

Like millions of baby boomers ages 55 to 65 who are on the brink of retirement, Rivman doesn't have years to recoup the losses to her retirement assets. According to the AARP, older Americans are the most vulnerable investors in these troubled times.

"People who are starting to retire are starting to panic," said Bill Losey, a certified financial planner and author of "Retire in a Weekend." "The number one fear of American retirees is 'Will I outlive my money.' "

Losey is trying to convince jittery retired clients not to cash out of the market. The AARP says some Americans 45 years and older are already raiding 401(k)s or curtailing contributions to pension plans.

"The last thing you want to have to do is pull from your investment portfolio - your stocks and bonds - when they're going down in value," he said.

For those still working, experts say retiring now should be the last resort in a bear market.

"Consider delaying several years and waiting to withdraw from your portfolio and taking social security a few years later," said Christine Fahlund, senior financial planner at T. Rowe Price. "You get eight percent more social security each year you wait."

So Rivman, like more than a quarter of all older American workers, has postponed plans to retire.

"I had been the good girl. I had saved, I had a nest egg. I did all the right things," she said. "I never lived beyond my means. I never had credit card debt."

Now she's delaying her golden years to secure her 91-year-old mother's - a promise she intends to keep.

[haley2481]

Unfortunately, the advice "keep on working" just isn''t an option for a considerable number of retirees. It is all too common for workers over age 50 to be either laid off or forced into early retirement, replaced by younger, cheaper workers -- or none at all, given this economy. Re-entry into the workforce can be nearly impossible. And many people are not in good health -- some with very serious illnesses. Watch the obituaries and see how many are dying in their 50''s and 60''s. Also, not everyone holds a white-collar professional job. Some jobs are grueling and very physical. So the cheery advice "just stay in the workplace" is a bitter myth and no option at all, for many people (excepting perhaps long-tenured professors, pundits and politicians, who haven''t a clue.)

[bombino23]

Since I am also a Senior looking for Retirement, and our 401 K is going down the tube each and every day, what if the Government will consider this:
Can retirees, that are willing to transfer their 401K to our mortgage lender, to pay our mortgage, and not incur any penalty for withdrawal before our retirement age? This way we will be helping the government with their bailout, and pay our mortgage, without any penalties. Plus investing the 401 K back into the system, vs waiting to draw out whne we are able to. I would like some comments on tis Option. Thank you

[jab232]

The last time I looked, the stock market was down almost 500 points today. One of my own 401K''s has lost sixteen thousand dollars in the last nine months or so. And what is John McCain doing? Telling lies about Barack Obama. People have lost jobs, homes, health care, pensions, retirement funds and are paying the highest inflation in 27 years. CEO''s like McCain''s adviser Fiorina got huge golden parachutes (40 mill in her case) to lay off tens of thousands of American workers. McCain expedited foreign companies like DHL taking over American companies and trashing them causing thousands to lose jobs. This nation lost 150,000 jobs last month and three quarters of a million in the last nine months, and what are John McCain and Sarah Palin doing about it? Putting out more and more nasty ads about Barack Obama. What do their lies have to do with anything that really matters? People are hurting out here and McCain and Palin don''t even care enough to talk about what they are going to do to stop the financial bleeding. They just plain don''t care about what is happening to us ordinary people. Put it any way you like, but they are so invested in promoting themselves into office, that they are willing to throw away the whole middle class. We''ve had enough of that. The working people are the ones who build the economy. McCain and Palin have forgotten the working people.

[jerr11]

"The number one fear of American retirees is ''Will I outlive my money.'' "


Nothin'' to worry about!!

They can always work.

Plenty of good jobs at Home Depot or Burger King, created by the Bush/Cheney economic miracle.

[brady61995]

how did seniors vote in the last two elections? might answer why they are struggling now. 95% of america is middle to middle lower class and they still vote for the people they want to drink beer with instead of who will look out for them. sad and just results for the voting majority of the last two elections.

[michaelcook2]

Let''s thank The Bush Administration, McCain and Reagan for setting up this TRICKLE down economy where the rich get filthy rich and the poor work until they are 80. McCain want to pursue the same policies. At the end of Bush Sr''s term in 1992 (in the Real Estate Recession) Republican''s threatened that raising taxes on the Rich would ruin our economy, but Clinton came into office with new Economic policies and raised taxes on the rich and our economy boomed for 8 years! How long are Conservatives going to fall for the Republican B.S.?

[rhs648]

I don%u2019t believe the value of an executive of a failed corporation is of more value than a hard working blue collar workers, yet they get to set their own wages often at thousands of times the wage of the ordinary worker.
Posted by indevoter at 11:56 AM : Oct 05, 2008

Actually the Boards of Directors typically set the wages of the CEOs and they fall into the hype of thinking they have to pay these idiotic benefits to retain someone with more than one functioning synapse. The CEOs do what any of us would do, try to get the best deal possible.

Posted by rational_1

You are both right. There doesn''t seem to be a correalation with CEO pay and poor performance. It makes no sense to reward failing CEOS with more pay, bonuses, and other perks.

[rhs648]

Either you are the most UNEDUCATED poster on these boards or the worst liar there ever was. Regardless FEW and I do mean FEW can make it on Social Security alone. Social Security only provides a safety net but the vast majority of retirees must depend on a pension from their employer or one they set up for themselves. The Republican''''s and their De-Regulate everything in sight have harmed them and will continue to harm them if McSame is elected.

posted by irmcvet97

Have you considered that Congress has oversight of the banks and financial institutions including Freddie Mac and Fanny Mae. Senator Chris Dodd and Barney Franks chair the two committees providing congressional oversight. Were they asleep at the wheel? Deregulation may not be the cause of our economic problems. Several years ago, some congressman and President Bush were calling for tighter controls. Their please were ignored. There is plenty of blame to go around. Sadly those responsible for oversight won''t be punished.

[rational_1]

I don%u2019t believe the value of an executive of a failed corporation is of more value than a hard working blue collar workers, yet they get to set their own wages often at thousands of times the wage of the ordinary worker.
Posted by indevoter at 11:56 AM : Oct 05, 2008

Actually the Boards of Directors typically set the wages of the CEOs and they fall into the hype of thinking they have to pay these idiotic benefits to retain someone with more than one functioning synapse. The CEOs do what any of us would do, try to get the best deal possible.

[rational_1]

Both candidates despite their perception are middle of the roaders and will not interfere with the financially secure lives of old timers.
Posted by melpol1 at 07:27 PM : Oct 05, 2008

However, the problem is that neither of them has any concrete plans to actually keep Social Security solvent in the long term. If you or I (or any bank for that matter) used the same fanciful accounting methods as our federal government, we''d all be in jail right now. I am completely, and I mean completely, ignoring my Social Security payments in my retirement plans.

[irmcvet97]

Well, it is time to look at other countries where our money will last longer. Costa Rica, Panama or Mexico are good bets. And why not? Mexico is close enough we can fly back or drive back for major medical care or for family matters.

Posted by nativehg at 05:37 PM : Oct 05, 2008

I think Obama has a surprise in store for you losers. Yep that''s right... IF you''re going to leave this nation and refuse to contribute your fair share, then you can forget the markets as well. See how you fair selling to those Third World Workers that make 30 Cents a DAY in wages. LOL

[irmcvet97]

Fifty million Americans receiving social security retirement benefits fortunately will not directly be affected by the economic crisis. Their monthly checks will continue arriving while their bank accounts are insured by the FDIC. The presidential election has little meaning to a retired person under those safe circumstances. Both candidates despite their perception are middle of the roaders and will not interfere with the financially secure lives of old timers.

Posted by melpol1 at 07:27 PM : Oct 05, 2008

Either you are the most UNEDUCATED poster on these boards or the worst liar there ever was. Regardless FEW and I do mean FEW can make it on Social Security alone. Social Security only provides a safety net but the vast majority of retirees must depend on a pension from their employer or one they set up for themselves. The Republican''s and their De-Regulate everything in sight have harmed them and will continue to harm them if McSame is elected.

[melpol1]

Fifty million Americans receiving social security retirement benefits fortunately will not directly be affected by the economic crisis. Their monthly checks will continue arriving while their bank accounts are insured by the FDIC. The presidential election has little meaning to a retired person under those safe circumstances. Both candidates despite their perception are middle of the roaders and will not interfere with the financially secure lives of old timers.

[iphyt4u]

no one has made money this past year, and if they say they did, your just dealing with another republican liar.

[nativehg]

Well, it is time to look at other countries where our money will last longer. Costa Rica, Panama or Mexico are good bets. And why not? Mexico is close enough we can fly back or drive back for major medical care or for family matters.

[jab232]

Hard times have wreaked havoc on retirements. You''d better believe it. Our own 401K''s have lost thousands of dollars. We''ll see if McCain''s running the nastiest campaign in modern political history will make people forget that 150,000 people lost their jobs last month, more than three quarters of a million lost their jobs this year. 401K''s have tanked. People have lost jobs, homes, pensions, health care, retirement and at the same time had to pay the highest inflation in 27 years. And it all came about because of the "deregulate everything" philosophy of people like Bush-Cheney, John McCain and Phil Gramm. McCain''s adviser Fiorina got a 40 million dollar golden parachute for laying for 18,000 workers. McCain expedited foreign companies like DHL taking over American companies, destroying them, and putting thousands out of work. The Republicans, with the help of people like John McCain have put us on the brink of depression. And of course, McCain hopes his nasty campaign with lies about Obama will take people''s eyes off all of that. I, for one, won''t be distracted by the Swiftboating. I will remember.

[nothappyatall]

The problem is not the original plan, the problem is the subsequent demographics. Life expectancy increased, forcing an increase in retirement age for full benefits. And, now, the number of new workers is going down,

Posted by BunchofChemi

The whole idea was lousy, it is totally reliant upon one thing- ever increasing population of workers which is unsustainable in a finite environment, it simply is unsustainable of a program because we can''t keep doubling the US population every 50 years but we did exactly that since 1950- that means more retirees which requires more workers paying IN.

It''s a catch 22 and doomed to fail no matter what.

[nothappyatall]

"The last thing you want to have to do is pull from your investment portfolio - your stocks and bonds - when they''re going down in value," he said."

Oh yeah, leave it in so when the market collapses like it did in ''29 you lose it all instead of just 20%, pull it OUT- you can always buy the stock and bonds again later IF they go up and get stable again.

[pebnan]

with companies and goverment plans to reduce or eliminate retire insurance it will force people to work longer and cut back on early retires . Sounds like they have joined together in their effort to make us work longer .

[irmcvet97]

I am very good at what I do. My problem is that most of my contemporaries have retired and I am asked continually how much longer I am planning on working. A lot of young employees want you out of their way. As long as my health holds up I plan on working at least another five years. I just hope that employers and coworkers will support someone''''s right to continue in the work force as long as they are able to do their job.

Posted by jbright9 at 08:36 AM : Oct 05, 2008

I don''t think that is an Issue. THERE are LAWS on the books or at least there were, if Bush and the Republican''s haven''t destroyed those to, that make it Illegal for anyone to discriminate against you because of age. The issue here is what "Trickle Down" and "Free" Trade have done to our nation. Have those who put forth those failed idea''s taken away your CHOICE to retire or not? Obviously when you look at what their De-Regulations and let the greedy do as they wish way of governing that choice has been taken away... completely. THAT is the issue.