Q: Should non-working middle-income retirees pull out of the market if they haven’t already in order to preserve a bit of savings and investments? Should they even be in the market at this age?— Nancy Hatch, Denver
A: Many financial advisers say pulling entirely out of the market — no matter your age — is not a good idea.
That’s because the losses you’ve sustained will have no foundation on which to build and recover when the market turns, as it surely should.
Advisers say it’s best for retirees to have a three- to five-year window of liquid or accessible assets on which to live until things improve.
A good financial planner already would have suggested that the elderly have accessible money-market or other less-than-volatile accounts available while their investments were riding the market wave.
Retirees should look at their portfolio’s investments, being more aware of the level of risk. If your investments are too conservative, chances are good that you’ll outlive your portfolio, as the population is generally living longer.
Many advisers say that portfolios ought not be depleted by more than 4 percent each year. Using that math, you should have a reasonable calculation for what you will need to sustain your retirement.
Choose investments wisely, not reactively to the markets.
Unless, of course, you think our entire financial system is about to collapse, in which case the problems are certain to be more extensive than anything discussed here.
David Migoya wants to get the answers to your consumer questions. E-mail consumertips@denverpost.com or write to Consumer Shopping Bag, The Denver Post, 101 W. Colfax Ave. Suite 600, Denver, CO, 80202.
