Saving More and Having Less for Retirement

Today's Market Teaches Good Lessons for Retirees

It's not unusual, in a down market, for your 401(k) balance to go down despite your contributions. However, in down markets you are purchasing investments at a lower cost so that when things do improve you will see greater increases than you would have had you stopped saving and stayed out of the market entirely. That said, now would be a good time to look at your investments, especially those managed by mutual fund companies that charge high fees. If you compare the performance of such investments with low fee index funds, you'll find that actively managed mutual funds aren't worth the fees they charge. Very few have been able to do better than a chicken pecking at the business section of the newspaper.

If you are retired, or near retirement, today's market is a good test of nerves which will hold you in good stead for the future. There will be other down markets during your retirement, just as there will be up markets. The key is to make sure your retirement lifestyle allows to weather the storms. When times are good, you will be tempted to increase your spending. Resist the temptation so that when the down markets come (and they will surely come from time to time) you can make it through, relatively unscathed.

Jonathan Edelfelt

Author of Who Said You Need Millions

www.WhoSaidYouNeedMillions.com

Jonathan Edelfelt of TX @ Aug 14, 2008 21:09:18 PM