OPINION: Boomers, don't make massive retirement mistakes because of the pandemic. Keep your emotions out of it, and stay in the stock market -- or else lose out on growing your money.
Well, someone ought to cover it and change the lyrics to “Retirement Is a Minefield.”That’s what many baby boomers are learning or relearning the hard way. Already out of the workforce or on the brink of retirement, these folks have been hit by the triple whammy of the coronavirus pandemic, the deepest recession since the Great Depression, and a huge market selloff that took the Dow Jones Industrial Average DJIA, +0.68% and S&P 500 index SPX, +0.64% down by a third .
What these mistakes have in common is that the two boomers lacked a clear financial plan or the discipline to stick with one. And in an all-too-human way, they let their emotions get the best of them. “I don’t have 10 to 15 years left to recover my losses,” Sklar explained to The Journal, a rationale that must have motivated many boomers’ panic sales. “At some point, I’ll need my cash to live on.”The story did not say what percentage of his retirement portfolio Sklar held in stock, but he recommends his 30-something children keep 100% of theirs in equities. In the first quarter of 2019, only 7% of Fidelity’s investors had their 401s invested 100% in stocks, half the percentage it was in 2009.
Granted, things may be even more out of whack now, with what seems like a permanent Fed “put” on the stock market. But the answer to that question is not 100% in stocks or zero . I think it’s closer to 50% stocks if you’re in your 60s or approaching your retirement target year. That’s actually what most Americans own, especially as they age.
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