Make us your home page

Amid turbulence, retirees urged to stick to long-term plan

Last week's turbulence on Wall Street was enough to give any investor chills. Particularly if you're a Tampa Bay area retiree who counts on investment income to pay the bills. Time to relax. Drastic times, experts say, call for merely minor measures. If you rely on checks from your investments, you've probably already refined your risk tolerance and set a long-term strategy. You've set up a well-diversified portfolio, with securities that grow to hedge against inflation over time, and securities that have a decent rate of return to support you. You're paying attention to the overall earnings of your portfolio, not just the interest and the dividends. So, calm down. You've already prepared for this day. "This economic stall will, too, resolve itself over time," says Bill Sieffert, senior vice president and portfolio manager at Northern Trust in Tampa. "Focus on the long term." If you're still uncomfortable, talk with a financial adviser. And check out these tips for minor adjustments you might make in a rough market. At the least, it might make you feel better.

How to be cautious without melting down

Of all demographic groups, retirees need to be the most careful about slumps in the market, writes Walter Updegrave of Money magazine. But what's the best way to be careful?

Scale back your stock holdings enough to allow for modest growth." At age 65, a rule of thumb is to invest roughly half of your retirement money in stock funds and the remainder in bonds and cash. Then scale back the amount devoted to equities until it reaches 20 to 30 percent of your portfolio in your 80s.

Carefully manage withdrawals from your savings. … If the markets head south early in retirement, you may want to pare back your withdrawals a bit." You may need your investments to support you for more than 30 years. That means protecting it, by drawing no more than 4 to 4.5 percent initially, then increasing the amount annually for inflation. This gives you an 85 to 90 percent chance your money will last. But that's just an estimate — it's no guarantee.

Updegrave's bottom line: The market can be unnerving. "But shifting assets around in a vain attempt to outguess the markets will likely create more problems than it will solve." Stick with your long-term plan, with just minor adjustments. You'll be glad you did.

Source: Money magazine

Amid turbulence, retirees urged to stick to long-term plan 09/16/08 [Last modified: Tuesday, September 16, 2008 9:53am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Memorial Day sales not enough to draw shoppers to Tampa Bay malls


    TAMPA — Memorial Day sales at Tampa Bay area malls were not enough to compete with the beach and backyard barbecues this holiday weekend.

    Memorial Day sales weren't enough to draw shoppers to Tampa Bay area malls over the long weekend. 
  2. Austin software company acquires second Tampa business


    Austin, Tex.-based Asure Software acquired Tampa's Compass HRM Inc. late last week for $6 million. Compass focuses on HR and payroll.

    [Company photo]
  3. Hackers hide cyberattacks in social media posts


    SAN FRANCISCO — It took only one attempt for Russian hackers to make their way into the computer of a Pentagon official. But the attack didn't come through an email or a file buried within a seemingly innocuous document.

    Jay Kaplan and Mark Kuhr, former NSA employees and co-founders of Synack, a cybersecurity company, in their office in Palo Alto, Calif., in 2013. While last year's hacking of senior Democratic Party officials raised awareness of the damage caused if just a handful of employees click on the wrong emails, few people realize that a message on Twitter or Facebook could give an attacker similar access to their system. 
[New York Times file photo]
  4. Big rents and changing tastes drive dives off St. Pete's 600 block

    Music & Concerts

    ST. PETERSBURG — Kendra Marolf was behind the lobby bar of the State Theatre, pouring vodka sodas for a weeknight crowd packed tight for Bishop Briggs, the latest alternative artist to sell out her club.

    Sam Picciano, 25, left, of Tampa and Molly Cord 24, Palm Harbor shop for record albums for a friend at Daddy Kool Records located on the 600 block of Central Avenue in St. Petersburg, Florida on Saturday, May 20, 2017. OCTAVIO JONES   |   Times
  5. How Hollywood is giving its biggest stars digital facelifts


    LOS ANGELES — Johnny Depp is 53 years old but he doesn't look a day over 26 in the new "Pirates of the Caribbean" movie — at least for a few moments. There was no plastic surgeon involved, heavy makeup or archival footage used to take the actor back to his boyish "Cry Baby" face, however. It's all …

    This combination of photos released by Disney, shows the character Jack Sparrow at two stages of his life in "Pirates of the Caribbean: Dead Men Tell No Tales."  Johnny Depp, who portrays the character, is the latest mega-star to get the drastic de-aging treatment on screen
[Disney via Associated Press]