BAD TIMES GET WORSE SAVINGS: Falling stock forces retirees to reassess

San Francisco Chronicle ^ | July 14, 2002 | Carolyn Said and Carol Emert, Chronicle Staff Writers

[sarcasm]

Jeanne Pentecost thought she was all set for a comfortable retirement. But since the stock market's meltdown over the past two years, she finds herself pinching pennies at age 72, and is even considering returning to work.

She's canceled her supplemental health insurance, given up plans to buy a condo instead of the mobile home where she now lives, and abandoned her dreams of traveling.

[dennisw]

So the SFChronic has an article about this and so did the NYTimes the other day. They all got the idea from the Wall Street Journal which had the same article, different interviewees, last Thursday. Maybe Friday.

[Viet Vet in Augusta GA]

These people need to go and spend about a week in Cambodia or any other third world country to see how looney they are to be whining about poverty in America...

[sarcasm]

It's also the top news on the radio this morning.

[Bill S]

Why would anyone 72 years old have a very significant portion of their assets in stock? Beginning around age 50, the stock portion of investments should be scaled back. I don't have much sympathy for these people or the idiots that report on them.

[sarcasm]

Washington Post today

As Stock Prices Fall, So Do Investors' Hopes

[jamaksin]

And the central theme of all dim-0-crat political campaigns for the November elections will be ... the GOP in bed with "big business!

Who do you suppose the 72 year old will vote for?

[sarcasm]

Don't brokers generally advise that you should subtract your age from 115 to get the amount that you should invest in stocks?

[Ben Bolt]

" I've talked to some young people recently and they are very adamant about being sure that they don't have all their eggs in one basket, That they pay attention to diversification and they put away as much as they possibly can starting early " .

If people do not take control of their own money someone else will . Speaking for myself , my father set a damn fine example in many areas but I refuse to follow behind him and I include my 8 older brothers with respect to finances .

[dennisw]

Thanks sarc. The lazy mass media is copying the original WSG story. That appeared Thursday.

[chainsaw]

They modified their original plan to buy a vacation cottage and instead are looking for a duplex they can use on weekends while making rental income on the second unit.

It's not the high cost of living, it's the cost of living high.

[TomGuy]

Before long, we'll hear "It's the economy, Stupid," and it will stick unless GWB takes some stern actions (not just talk) to restore economic confidence soon. Younger people can wait it out; older people can't. While blaming Clinton is always fun and games, it's Bush2's watch now. And people vote based on their pocketbooks.

[Bill S]

The brokers make their money from selling stock. Do you really think that at age 85 with an average life expectancy of 7.6 years you should have 30% of your money in stock?

[freeper12]

>>Charlotte Cook, 55, of Oakland, and her husband Richard, 59, reassessed their finances recently and decided to invest all of their future retirement savings in real estate.

The NEXT bubble will be real-estate...all those people pulling whats left of their money out of stocks and plowing it into second homes are going to be doubley disappointed when the real estate bubble burts next...

[dennisw]

More at: http://www.worldpress.org/Europe/240.cfm Corruption in Albania: Up from the Bottom
Alfred Peza, Klan (independent weekly magazine), Tirana, Albania , July 30, 2001

 

 

Only one year after former President Sali Berisha’s departure from power, in August 1998 the World Bank ranked Albania as the most corrupt state in Europe. Almost half of Albanian citizens admitted to paying bribes, while two-thirds of public officials admitted that bribery was a common phenomenon in the country. However, even at this time, corruption did not present a dire issue for Albania in the eyes of the international community. The country had just recovered from the turmoil following the collapse of the pyramid [financial investment] schemes [in 1997 in which thousands of Albanians lost their savings]. Corruption indices were going down as the state was consolidating and the economy was recovering. In 2000, the World Bank ranked Albania as Europe’s seventh-most corrupt country.

Demonstrators in Tirana, Albania protest the collapse of a government-run pyramid scheme in 1997 (Photo: AFP).

[Bill S]

What "stern action" would you suggest?

[freeper12]

>>Why would anyone 72 years old have a very significant portion of their assets in stock? Beginning around age 50, the stock portion of investments should be scaled back. I don't have much sympathy for these people or the idiots that report on them.

At age 50 you still have an additional 35-40 years of life expectancy...you can't just dump it all into a cd and forget about it if you need to grow your nest egg...conventional wisdom would say that at age 50 you should still have 50% in stocks...on the other hand, I know a few retirees whose biggest lossest this year have been in the bond market, i.e. worldcom and a steel company that went bankrupt(bethlem maybe?)...other than treasuries and/or cd's there has not been any real "safe" place to invest this past 18 months or so....

[sarcasm]

Personally, no. This, however, is the rule of thumb that I have seen many times.

[Bill S]

I said "scale back" not dump it all. At age 72, 20% would be a reasonable stock allocation and if that declined even 50% only 10% of your portfolio would be affected. Treasuries and CD's ARE the way to go for older folk. I wouldn't have considered Worldcom bonds even before their collapse.

[sarcasm]

Let's hope that it doesn't come to that.