Ask Terry Questions Nearing Retirement and worried

Nearing Retirement and worried

By Terry Savage on December 22, 2018 | Investments

Hi Terry – I am an avid listener on WGN radio and reader of your columns. My wife and I have a well diversified portfolio, but like everyone else we are losing a lot of money with the recent downturn. I am 65 and plan to continue to work until 67 at which time my wife will be eligible for Medicare. 1/3 of money is with Fidelity, 1/3 with Morgan Stanley, and the final 1/3 in my Schwab 401K, We do have chicken money set aside. My question is this: Given that I have 2 working years left, do I have enough time to recoup from this tremendous downturn? Fidelity says that in their planning for us, taking into account all out assets and using the Monte Carlo simulations for “worse case” scenarios, that we should be alright, but quite frankly, I am very nervous! Your thoughts please?

Terry Says

Did Fidelity take into account your OTHER two investment portfolios — or only the one they manage?  That could make a big difference.  No one knows in advance whether a bear market will continue downward beyond a 20 percent loss — or rebound.  But your first few years of retirement are supposed to be the best and most enjoyable ones.  So if you have at least 5 years of “chicken money” (see my recent column) set aside for living expenses including travel — and enough liquidity inside your retirement accounts for at last three years of Required Minimum Withdrawals — you should be able to sleep well and enjoy retirement.

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