Investors have been hit hard by the stock market's fall since March 2000: American Express Financial Advisors calculates that an all-stock portfolio (65% large-cap, 20% small-cap, and 15% international) has lost 37.4%. Here's how three would-be retirees would have to adjust their plans to make up for the loss if they still want to retire with $100,000 a year (aftertax) in current dollars:
RETIRING SOON
Age Now: 58
Target Retirement Age: 62
Portfolio Value January, 2000: $1 million
Portfolio Value Now: $625,600
CHOICES
-- Postpone retirement to age 68
-- Save an additional $120,000 a year
-- Plan to retire on income of $60,000
-- Combination: Save $18,000 more a year, retire at age 65 on $95,000 income
MIDCAREER
Age Now: 50
Target Retirement Age: 62
Portfolio Value January, 2000: $505,000
Portfolio Value Now: $315,900
CHOICES
-- Postpone retirement to age 67 1/2
-- Save an additional $33,500 a year
-- Plan to retire on income of $60,500
-- Combination: Save $9,000 more a year, retire at age 65 on $96,000 income
JUST PLANNING
Age Now: 40
Target Retirement Age: 62
Portfolio Value January, 2000: $180,000
Portfolio Value Now: $112,600
CHOICES
-- Postpone retirement to age 66 1/2
-- Save an additional $10,250 a year
-- Plan to retire on income of $69,000
-- Combination: Save $4,000 more a year, retire at age 64 on $97,000 income
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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