Some near retirement are waiting out the financial crisis

Milwaukee Journal Sentinel (MCT) - Jean Knoll figures that at age 60, she doesn't have 15 years for her investments to recover from a Wall Street meltdown.

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So she hopes for a rebound.

"It's always scary to watch your savings that you've worked so hard for go down, but what else can you do?" said Knoll, who works as a retail clerk in downtown Hartford, Wis. "I figure I'll have to work into my 70s now."

People like Knoll, who are at or near their planned retirement age, say they have little choice but to sit tight for now and see what the carnage in the financial markets is doing to their futures.

Taking a wait-and-see approach, instead of unloading stocks now, makes the most sense for many investors, financial planners say. Dump now and you will miss out when the market rebounds, they say, noting that the market has recovered from previous crashes.

That's little solace to Patrick M. Dailey of Milwaukee, who works in health care.

The 57-year-old retired Marine has had to put off his planned retirement date.

Daily said he originally planned to retire at age 62, and hoped his military pension, Social Security and 403(b) retirement plan, and pension would be sufficient for him to maintain his standard of living.

"Unfortunately, however, with the way the government is allowing Wall Street to steal our money, and allowing the CEOs of these failing investment companies and mortgage firms to walk away with huge bonuses, I now plan to work at least until age 66," Dailey said.

Dailey is critical of the proposed $700 billion federal Wall Street bailout plan.

The bailout is being described as the biggest intervention in the financial markets since the Great Depression.

"I sure would like them to kick 100 grand my way to help me out. But there's no way they are going to do that," Dailey said.

With retirement plans and other investments being hammered by the down market, people who are close to retirement age are deciding to delay their plans, said Keith A. Bender, an economics professor at the University of Wisconsin-Milwaukee. Their chief worry, he said, is that the market might tank soon after they retire, leaving them short on funds for living.

Bender, who has researched happiness in retirement, said that the one thing retirees don't like is "uncertainty in their income streams."

And there's plenty of uncertainty out there.

In a survey conducted earlier this year before the Wall Street meltdown, only 18 percent of workers were very confident about having enough money for a comfortable retirement, down from 27 percent in 2007.

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Thirty-nine percent of retirees believe they likely will outlive their nest eggs, up from 29 perckent in 2007, according to the survey by the Employee Benefit Research Institute, a nonprofit group that focuses on health, savings, retirement and economic security issues.

Craig Copeland, a senior research associate with EBRI, said the numbers likely are worse now and won't get any better when the survey is conducted again in January 2009 unless there is an overwhelming positive response to the bailout.

The survey showed that more people have put off retirement and more people are working in retirement to meet their needs than in the past and that is a reflection of the state of the economy.

Retiree Byron Reinheimer, 79, of the Merton, Wis., is among those worried about his investments. He has about $355,000 invested in government bonds. The investment had a return of about 4 percent, but this year the return has been at or below 1 percent.

"This is what's scaring the pants off me. I was making $18,000 a year off the government stuff. Now if I make $3,500, I'll be lucky," said Reinheimer, a retired insurance salesman.

"I didn't want to spend principal. I wanted to live off interest," he said.

Back in Hartford, Knoll says she can barely stand to watch what's happening to the nest egg she and her husband, Andy, are counting on. Knoll and her husband, who is disabled, live on his worker's compensation benefits, their investments and her wages as a retail cler.

"I didn't even look at our last monthly (investment) report _ the one before that was so bad," she said.

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© 2008, Milwaukee Journal Sentinel.