Can You Maintain Perspective?

There is a cautious optimism growing among investors who believe the current market turmoil may slow their retirement progress, but not stop it altogether. That seems to be the word out of AARP Financial, which just released the findings of a nationwide survey on that subject.

Its president, Richard Hisey, says, “Clearly everyone’s situation is different, but overall, we believe now is the time to remain focused on the long-term and not use the current economic uncertainty and market volatility as an excuse to delay saving, investing, or planning for retirement.”

The survey reveals that some 46 percent of those questioned feel that no matter what they do, it is unlikely they will be able to have a financially secure retirement and that one in three believe they will never be able to stop working. That’s kind of scary. “There’s an assumption that a successful retirement planning effort requires complicated planning scenarios, complex financial products, and dramatic lifestyle changes,” adds Hisey. “The key is to make sure your investments are well-diversified and to remember that retirement is like diet or exercise. A series of small changes now may make a significant difference over time.”

So, what to do? AARP Financial tenders a few suggestions:

1. Stay focused on the long term because retirement is a long-term goal. Reacting to every up and down in the market is neither good for your health nor your portfolio.

2. Maximize your retirement plan contributions. So, if you have a 401(k), maximize your contribution, even if your employer has suspended any matching contributions.

3. Don’t forget about IRAs. They may offer certain tax benefits.

4. Take advantage of Catch-up Contributions. Keep in mind that once you turn 50, you can increase your contributions to your IRA and 401(k) or 403(b).

5. Don’t forget your significant other. If you are still employed but your spouse is not, you may be eligible to make a contribution to a traditional or Roth IRA on his or her behalf.

6. Make investing automatic. In short, establish an automatic investment plan.

7. Resist impulse purchases. In other words, think twice before making a discretionary purchase.

8. Get and stay informed. Many people struggle with fundamental terms and concepts about planning for and generating income in retirement.

You can visit AARP Financial at www.aarpfinancial.com/ris .