We measure the health of the economy as a whole by a few big numbers – interest rates, which the Federal Reserve raised by three-quarters of a point on Wednesday; GDP, which we learned on Thursday fell for the second consecutive quarter; And the stock market, which has been jumping for months. But for people working toward, or dreaming of, retirement, the most important number is closer to home: their retirement savings. And the volatility of the big picture numbers is related, of course, to individual plans.
The New York Times wanted you to know how this uncertain moment is affecting you and how you’ve been managing your retirement savings and investments.
Hundreds of you around the world have responded to our inquiries. Some readers had specific questions, such as when to take Social Security. But others, like these six, offered a broader view of their personal circumstances and how they were trying to find composure.
At a time when many feel the disconnect between the macro and the personal—the latest poll showed general anxiety among voters about the economy even as some see stability in their lives—these readers’ experiences show that there are a variety of ways to cope.
“I consider this an opportunity to buy cheaper”
Only now has Michael Lewis been able to realize the value of having John C. Bogle, founder of Vanguard, as a speaker for his high school start. At the time, Bogle’s influential investment advice for ordinary Americans meant little to teenage Mr. Lewis, who works as a director of marketing research at a technology company. But today, following the example of his grandfather and his mother, he is an avid investor in the vanguard.
“I didn’t really appreciate it until long after the accident,” said Mr. Lewis, 41, of Berkeley, California. “I didn’t really get involved until I dropped out of college and started investing with them.”
He hasn’t been bothered by recent market uncertainty as much as the 2008 crisis did. He remembers the mistakes he made the last time he sold mutual funds at a loss.
He said, “Basically, what she said to me was, ‘Just don’t do anything.'” And in fact, knowing myself, I see this as an opportunity to buy cheaper, because I’m not going to retire anytime soon.”
Mr. Lewis is also careful not to monitor his retirement investments too closely, other than to look “too high” to make sure the accounts are in line with market performance and nothing fraudulent is happening.
“I think it will eventually go up,” he said, adding that his and his husband’s pension funds invest primarily in index funds.
Mr. Lewis expects his retirement to look different from that of his parents and grandparents. He sees himself working as a consultant during his seventies. “Think about it – you have reached the pinnacle of your knowledge in a profession and then you stop,” he said.
As an only child, he regularly discusses investing with his mother. “I benefited from starting to have a certain level of financial knowledge,” he said. “And having someone to ask questions and bounce off ideas.”
A guide for investors
The stock and bond market slump this year has been painful. It remains difficult to predict what the future holds.
I don’t want to gamble
For Stephen Shaw, retirement doesn’t mean leaving work. Instead, he believes retirement will allow him to choose the projects he wants to work on and finds fulfilling.
“I want to be in a place where I don’t have to make any compromises about the kind of work I do and with whom I work,” said Mr. Shaw, 54. “And I’m very close to that.”
But Mr. Shaw, who lives in Munich and runs his own philanthropy advisory firm, has calculated what he and his wife consider the minimal savings they will have to incur to support the plan. Recent volatility in the markets has prompted Mr. Shaw to keep a close eye on balances. He does a weekly calculation to rebalance the portfolio and to ensure that even if the shares drop an additional 50 percent, he and his wife will be able to maintain their current standard of living. He describes this as making sure they are still “in the green” – and if they don’t, they will cut back on their expenses.
“When the pandemic hit, in fact, I was approaching that breaking point with the 50 percent rule,” he said. “It didn’t look good.” At that time, his portfolio contained 60% of the shares. When the markets recovered, Mr. Shaw re-allocated 50 percent in shares.
“I know I’m leaving some potential in there, but I’d rather be on the safe side,” he said. “I don’t want to gamble.” (He said he would eventually get some income from a government-administered pension, but it “won’t be much.”)
With prior work experience including consulting and tech consulting, Mr Shaw said he became confident knowing he lived on a fat and light paycheck – and that he and his wife could readjust if necessary.
“I know that even if I take a bad financial hit, there will be a way around it,” he said.
“I’ll just hold my nose and work”
Dr. Melissa Yuan Innes is a firm believer in the movement known as FIRE – Financial Independence, Retire Early. An emergency room doctor in her forties who lives outside of Ottawa, she manages unpredictability by working longer hours — or spending less time.
Her hospital hours have fluctuated over the past several years, an arrangement that helps her balance care for her two children, now 16 and 11, and develop another career as a writer of thriller medical films. FIRE’s approach — which involves maintaining frugal habits and making as much cash as possible — means she and her husband, the engineer, can maintain their lifestyle. Currently, she works 10-20 hours a week in the emergency room but will work more if needed.
“I needed to rely on myself,” said Dr. Yuan Innes. “I’m just going to hold my nose and work.”
She said knowing that she could get more work helps her stay out of the market.
“I’m ignoring them,” she said. “If we needed more money, we would just make more money – I’d rather not do that, so that’s sad, but it’s certainly not as difficult as people on minimum wages.”
She added, “I feel so lucky – because sitting down and looking at your wallet just plays with your head.” However, Dr. Yuan-Ennis saw their bonds depreciate and would consider selling them later.
She eagerly admits her background. “I confess my privilege to have parents and grandparents who worked very hard before me,” said Dr. Yuan Innes. “Many types of financial independence will tell you that they are completely self-made, unaware of the benefits they have gained from white privilege, sex, middle class, education, government, or the sacrifices of their kin.”
“We are fortunate to have enough money to cover what is happening,” she said.
A lifelong news addict, Leslie Westbrook, was off TV when stock markets plummeted this spring and all she saw was red.
She said watching the crawl on her screen was exhausting. Ms. Westbrook, 69, of Carpinteria, Calif., said: “I kind of feel like your blood pressure is following you. What’s going on in the stock market — we’re supposed to wait a long way, but we have short memories, in some ways.”
Ms. Westbrook’s grandmother played a large role in sparking her interest in investing. Her grandmother worked as an accountant in the wholesale products industry in Los Angeles and invested her own money, encouraging her family to think long-term about their finances. Then there were Grandma’s Christmas gifts to little Leslie: stock certificates at companies like Ford Motor or Safeway. Ms. Westbrook sold these childhood stocks a long time ago, but the financial lesson continued, she said. She has a counselor to manage her retirement accounts, but says she enjoys trading a small IRA that she inherited from a friend.
“I consider the stock market like legal gambling,” she said.
For income, Ms. Westbrook relies on a combination of Social Security, earnings from her work as a freelance travel writer, and work as an auction liaison. For this job, she utilized a background in art and antiques to help clients send special items to major auction houses; You get a portion of the sales. She also volunteers and helps organize a mural honoring the Latino community in her town.
She said, “I’m a baby boomer, so you’re thinking, ‘How am I going to retire? “And you know, if I knew when I was going to die, it would be a lot better.”
‘We still have a portion of the profits’
Steve Adams, 65, wants to retire within a few years from his software company near Charlotte, North Carolina, and join his wife, Janet Wilson, 70, who is already retired. But amid stock market volatility, his full-time job gives them a breather and a chance to invest when they dip.
“The market has been ridiculously inflated for a number of years now, and it just needs to pull back so it can self-correct,” Mr. Adams said. “It presents a very good buying opportunity.”
This ability to see the bigger picture was difficult. Mr Adams said they were “beaten” during the 2008 financial crisis, but he pushed them to start working with a financial advisor. The advisor directed them toward dividend-earning stocks, and over the past 14 years they’ve designed a portfolio with dividends that will cover their living expenses when they retire, he said.
“We have seen a drop in the value of the shares, but we still have a portion of the earnings,” Mr. Adams said.
They also planned before Janet retired and paid off the mortgage on their home two years ago.
“That’s great, because you have a safety net if things go to hell in a hand basket — as long as the real estate market stays strong, you can always do a reverse mortgage or something,” he said.
Mr. Adams is also encouraged by the knowledge that his company is in good health. So far, he said, he hasn’t seen a slowdown in its revenue as it did in 2008.
“The goal is, if I can retire when I’m 67, we’ll have more than enough monthly income,” he said. “I’m going to miss some big paychecks, but that’s what it is — I mean, I could be left for dead in a couple of years. I’d rather spend some time traveling.”
“How much time do I have left?”
Covid turned Erwin Schoenfeld’s working life upside down in 2020. He fell ill in March of that year, and three people close to him died in the spring of that year. This punch affected his retirement about a year ago, leaving his position as Professor of Psychology at City College and Graduate Center at City University of New York.
He said, “I was thinking, ‘How much time do I have left?'” “And it was very difficult—I have to tell you, I’m still hesitant about retirement.”
Professor Schoenfeld, 74, of Brooklyn, doesn’t care much about market movement, because he and his wife consider themselves lucky to have a steady income from his pension (though it doesn’t include cost-of-living increases, he notes). But he misses the job he loved and the colleagues and students he enjoyed through the classic film club he started. So he remains engaged in research and publication. A Native New Yorker, he began writing memoirs about growing up on the Glenwood Houses project.
Volatile markets are on his mind, but after experiencing the financial crisis, Professor Schoenfeld and his wife decided to save at least two years of living expenses in cash to weather the market downturn. As the son of two parents who lived through the Great Depression, maintaining stability was essential to his financial planning. His father was a postal clerk, and his mother was a part-time sales employee at Abraham & Straus.
“They were humble, and I went to Brooklyn College because it was free, so I know what a lower middle class life is like,” he said.
Professor Schoenfeld vividly remembers New York’s financial pressures in the early 1990s, when the state cut his university’s budget and permanent professors lost their jobs.
“It was really scary,” he said, “because my kids were in elementary school.” “I knew there were bumpy roads ahead, and I didn’t let the ensuing boom in the Obama years give me the illusion that I was made of Teflon.”
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