The stock market’s recent volatility has some Philadelphia-area baby boomers rethinking their retirement plans. Cynthia “Cindy” Arena, 66, of Phoenixville, was supposed to retire next week after a 35-year career as a paralegal. However, after watching her retirement savings accounts fall, she had second thoughts.
“I just started thinking, ‘I’m scared,'” Arena said. I lost a lot of money. I’m starting to get some of it back, but I was raised by a parent of the Depression.
I was very mindful of money and saving my whole life. So that’s probably why I can’t let go of the idea that retirement is not the best choice right now.”
Instead of fully retiring, Arena will continue working her paralegal job two days a week. This will allow her to still bring in income while starting to collect Social Security.
She plans to hold off as long as possible on withdrawing from her investment accounts. Retirees and those who had hoped to retire soon nationwide have had to make adjustments. Nearly a quarter of U.S. residents 50 and older, who have been saving for decades, felt the impact of the April downturn.
Financial advisor Kahlilah Dowe said she’s hearing a lot of questions from clients who typically have between $250,000 and $1 million saved for retirement. “Should I sell? What should I do with my investments?
Retirement plans shift amidst market turmoil
How do I preserve what I have? Because I don’t know what is going to happen from here,” Dowe said.
Even wealthier folks with between $2 million and $5 million in investments are not insulated from the emotional aspect, according to Brendan Dooley, president and CEO of an investment firm in Flourtown. “Nobody is immune from this,” Dooley said. The five years before and after retirement, sometimes referred to as the “retirement red zone” by financial experts, is a critical time.
Bad market returns in that 10-year window significantly increase the likelihood you’re going to run out of money,” Dooley said. Some Philadelphia-area retirees are staying the course despite market anxiety. Margie Merlino, 63, retired last year from a career working on clinical trials.
She always planned to work part-time in retirement, but in a low-stress environment that she enjoyed. Merlino has picked up two part-time jobs and is leaving her retirement savings mostly untouched for now. She’s trying to remain optimistic, reminding herself that investments are a long game.
“I’m definitely more concerned than I was when I retired,” Merlino said. “But not enough to say, ‘I have to trash my plan.'”
For Arena, cutting back her work days will allow her to travel and strike a better work-life balance. When she fully retires, she looks forward to diving into volunteer work.
But for now, she said, that’ll have to wait.