Retirement plan decisions made easy
abcInvesting Blogs
March 2010
March 24, 2010
Postponing Retirement Because of Your 401k Account?
Some business leaders expect that their employees will postpone retirement because of the declines their 401k accounts suffered in late 2007 and 2008. New research casts doubts on that, but we'd like to know what you are thinking. Please post a comment if you have--or have not--changed your retirement plans because of your 401k's performance.
Here's the reason for doubting that lots of folks will change their behavior. Three economists have studied "Stock Market Fluctuations and Retirement Decisions," and they note first that defined benefit retirement accounts such as 401ks are only 15 percent of net worth, on average, for baby boomers approaching retirement age. Social Security benefits are a more significant asset, if you think of the stream of future benefits as an asset. Most folks nearing retirement age have home equity--in fact, many of them have paid off their home in full.
On the negative side, a person who could either keep working or retire, and then loses his job at age 62, may simply take early retirement rather than start a new job search.
What are your plans?
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