Many folks facing retirement ask: “is it a good time to retire?” Recent studies have reported that because of the bond market, inflation, and other factors, today may be the worst time to retire in a generation. But there are some things you can do to help get you to retirement – and more importantly, through your retirement years, according to Matt Allgeyer, Financial Planner at Wamhoff Financial Planning and Accounting Services.
|Loaf of Bread||$0.51||$1.65|
|Gallon of Gas||$1.55||$3.56|
|First Class Stamp||$0.15||$0.46|
Investment Statistics: (According to a recent Bankrate Study)
|# of Yrs $1 mil will last in retirement||More than 30 years||25 years|
|Real Return, 30 yrs, on 60% stocks and 40% bonds||7.7%||1.9% (projected)|
|2-Year Treasury Bond Yields*||Approximately 8%||Approximately .32%|
|5-Year Treasury Bond Yields**||Approximately 12%||Approximately 1.4%|
*The highest 2-year treasury note rate was 16.27% in 1981. The lowest was 0.16% in 2011
** The highest 5-year treasury note rate was 15.94% in 1981. The lowest was 0.56% in 2012
What you can do:
- Actively manage your money and rebalance to ensure that you have a proper mix of investments.
- Diversify, both inside and outside of the market.
- Reconsider your ideas of what you think are “safe” investments. Many folks feel the bond market is safe, but recent performance may indicate otherwise.
- The first two years of retirement are crucial! They can make or break your ability to maintain income through your retirement, so be sure to have a plan for how you’ll withdraw funds, where you’ll withdraw from, and how you’ll continue to invest.
- If you’re properly diversified and actively manage your money, you have a better chance of being able to withdraw the traditional 4% from your portfolio (the four percent rule), or possibly more.