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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow likely is an upcoming recession and how might it affect a person who wants to retire?
My sister, age 71, has a decent job but is thinking of retiring soon. Her company is putting her through some new training, and I don't think she's thrilled to be doing it, so she's thinking of calling it quits. If we get a recession in the coming months, how will it affect her? BTW, she has some savings, but not a lot.
PTWB
(4,131 posts)former9thward
(32,046 posts)If she has not taken it yet she would be eligible for a maximum benefit at age 70. A recession generally puts the brakes on inflation which would help people on a fixed income.
jmbar2
(4,902 posts)The recession will come later in this year or early next, and could drop the stock market down about 30% from recent highs on a short term basis.
However, the rebound after the recession would take us past recent highs.
She should budget cash to live on through the recession so that she doesn't have to take cash out of her retirement savings at the lows of the market. Leave the rest in her acct untouched. After the recession, it will likely resume an upward trend. in the long term, the market has always moved up.
JMHO. I am not a financial advisor, but daytrade, so I read a lot. She should talk to a real financial advisor/fiduciary.
This was very helpful.
PoindexterOglethorpe
(25,868 posts)It maxes out at 70.
Does she have a pension or 401k? I hope so.
W_HAMILTON
(7,870 posts)My mother was basically driven to retirement after the Great Recession. Once she broke the habit of working full-time and was essentially forced to "take the plunge" into retirement, she found that she was able to exist financially quite well. And she didn't have much saved up either. Fast forward to today, and her savings have all dried up, but she is still able to exist on her Social Security; however, her physical health has deteriorated severely, due in large part to simply not doing much in her retired life. Warn your sister about this. Odds are, this will be a bigger worry for her in her retirement than finances. Find ways to stay active, maintain your social relationships, etc. Don't just wither away.
slightlv
(2,828 posts)I was more or less forced into retirement before 65 due to a chronic illness. Jump into a year and a half later and everyone is working from home. Call me still bitter, since what I did, I did on Wi-Fi, whether I was at home or sitting my butt in a chair at work! Oh, well, water under the bridge. Regardless, I always said I had SO much to do I'd never find time to do it all once I retired. Maybe it was the circumstances. I don't know. But suddenly, I didn't know what to do with myself! And I found myself as one of those who could easily wither away if I weren't careful! Once your work is taken away... if you're one of those people who lived all their lives working... it's way too easy to suddenly feel like there's nothing "left to do" when it's gone. Your house can only be so clean! And, even tho the house only seems to get away from me these days, especially with my autoimmune disease making it harder and harder to keep up with it, I find I have to make myself create a seasonal project for myself and/or myself and my hubby to accomplish. It may be the house; it maybe something to leave the kids and grandkids. It may something to accomplish on the computers just for us. Each year, as the marbles seem to diminish more upstairs it gets a bit harder. But the important thing is to keep trying and doing. And not to give in to the TV and rocking chair. The latter is just SO much easier! (lol)
Oh! And about the Social Security. We're now worried the New Deal elements, including the Social Security checks and Medicare will soon be gone once RvW are gone. We know the Republicans want all the money, and that they hate the New Deal elements with a passion. That's one thing to keep in mind... not just the Recession. They always come and go.
iemanja
(53,038 posts)Mine are down considerably.