Editorial: Retirement dreams drifting away

Staff Writer
Mount Shasta Herald

The bad news is hitting home this week, in millions of ordinary-looking envelopes. We know the financial crisis has hit markets around the world, we know it's hurting our retirement accounts and those with basic Internet savvy know we could learn the impact down to the penny with a few clicks of the mouse.

But most of us wait for the quarterly statements to arrive in the mail, and open them with trembling hands.

Inside, we find, in cold, hard numbers, our retirement dreams drifting away. Depending on your investments and the size of your account, your nest egg has lost thousands of dollars in value since the first of the year. You've lost even more since the statements were generated on the first of the month.

You aren't alone. According to the Congressional Budget Office, Americans' retirement accounts have lost as much as $2 trillion in the last 15 months.

It's not just the 401(k)s and IRAs that are taking a hit. The Massachusetts state pension fund lost $8 billion since the first of the year, half of it in September. And you think your retirement account took a bath. Officials say it will take years for the pension fund to recover.

These losses have implications for workers nearing retirement, and for the economy as a whole. More than half the people surveyed for an Associated Press poll in September worry they'll have to postpone retirement because of the declining value of their retirement accounts. An AARP survey found that one in five workers older than 45 has stopped putting money into a retirement savings account, and nearly one in four is working more hours.

Retirement-account shock reverberates through the economy. People are juggling their portfolios, trading stocks for less risky investments and, in the process, driving markets down further. People who are worried about the future stop spending, and big drops in consumer spending will drag the economy deeper into recession.

As government officials and central bankers around the world take unprecedented steps to stop the dominoes of economic disaster from falling, the best most of us can do is take prudent steps to protect our assets. In light of the new reality, we're forced also to reconsider retirement. For most of us, the dream of going from full-time work to full-time play at age 65 is no longer realistic. Now what do we do?

MetroWest Daily News