SALT LAKE CITY (ABC4) – The cost of food and gas are up and stocks are falling, which is causing some people to worry about if or when they will be able to retire.
Local experts that said although this can look scary, it’s important to not panic.
“We have talked about maybe having my husband work longer, and they have perks if you work something like 70,” said Lori DeGraffenried, a mother of eight.
“I am scared, it’s so hard to be on pension and buying food,” said Paul Burton.
He says he retired three years ago – and it’s concerning to see prices rise.
“It was a lot cheaper, now it’s high, I had savings in my bank and now it’s going down,” he said.
“Those that are retired, it’s tough too because you allocated your money, you locked it in based on how much you think you will need for retirement,” said Jeremy Blair, the VP of finance at Mountain America Credit Union.
And now this week, Wall Street is showing heavy losses as stocks fell into a bear market.
“It’s when a market usually goes by some index, like the DOW Jones Industrial Average, the S&P 500 or the Nasdaq have declined by 20 percent or more from their prior peak,” said Steve Bannister, an associate professor of the department of economics at the University of Utah.
This has many people worried for their retirement, who are dependent on 401k and other stock-heavy retirement accounts. But, although it sounds concerning, local experts say there is hope.
“We’ll likely see this turn around in the next 12-18 months,” said Blair.
So, he says now isn’t the time to be pulling money out.
“You’d be locking in a 20-25 percent loss on your current investment portfolio and that’s tough because you never know when this is all going to turn around and go back up,” Blair said. “Markets are cyclical, they always turn around. The best advice we can give is to hold on for the long ride, you’re gonna get through this and we’re gonna come out the other side.”
And when it comes to inflation, he recommends looking at your budget and where to save.
“Budget tighter, you’re gonna have to look at those things and look at your spending on a day to day and monthly basis and say what are those things I can do without right now, what are the things that have spiked up the most in cost — are those things I can cut out of my budget or at least reduce a little bit,” he said.
He also suggests if you have concerns or want more one-on-one help, to see a financial advisor.
“If you’re already retired, or you’re very near that retirement age, it’s the scariest thing to see markets dropping and seeing that value of your nest egg going down. If you have a few years, try not to get worried about it, try to stay the course. It will come back up,” Blair said.
“If you’re very close to retirement age, make sure that your allocations are such that you have access to cash them when you need in the next two to three years in case this were to last a long time, which it probably won’t. You definitely want to make sure that you have the cash that you need for the next six to twelve months allocated appropriately. But if you got three, four, five years before you’re going to need any of that money, chances are it’s going to come back in that time frame.”