Retirement
Dear Terry,
I have about $100k in savings. I’m 50 and going to retire at 60. I have a union pension that will be about ~$7k/month. I am considering investing $50k in the S&P. Is this a smart investment?
Terry Says
Gosh, that’s a tough call for me to make. The risk of investing has to be taken in context. You say you’re going to retire in 10 years. Will you have enough income from Social Security and a pension to cover your expenses — and that has to include the cost of health insurance (which perhaps you get to supplement your Medicare costs).
Basically, you have to understand that we could have a market decline of 50% — and we might be overdue for that to happen — sometime within the next 10 years. You’ll probably be ok if you don’t panic — because even retiring at 60, you’re likely to live an additional 20years — during which you’d likely recoup any bear market losses. But if you panic and sell out — then the money is simply gone.
It’s hard to plan in advance just how you will react in a stock market decline. It becomes very emotional.
That’s why I think you might have better perspective after a review by a fee-only FIDUCIARY advisor who is not trying to sell you anything. Find one here:
https://www.terrysavage.com/pam-krueger-wealthramp/
