Flexing Stock Market Suspends Retirement For Many Older Americans

Saturday, March 1, 2003

Ry, dale! aN wake: sate nex ruc ra “aarevide wre oHe # tay pe Seem ALAR ice‘A new jaoh a al “Ne Le woe MBs a mec Poy Sna ad! st s and Sion | Neale ty named mof Gs out ore *sa (NAPSA)—Sixteen percent of workers admit they are not at all confident they will have enough money saved for retirement, up “In most cases, fixed-interest from just 10 percent last year, according to a poll conducted by the Employee Benefit Research Institute. While retirement was once a cornerstone of the American Dream, it is now in question for many Americans as they scramble to dig their way out from under massive investmentlosses. The three-year downturn of the economy, has resulted in investor losses of an estimated $7 trillion since the stock market peaked in March 2000. The nation’s unemployment rate rose from 4.7 percent in 2001 to 5.8 percent in 2002, swelling the jobless ranks by another 1.6 million people, according to the Associated Press. Although the numbers are daunting, the true devastation lies in the personal stories of those who worked a lifetime only to see their savingslost in retirement. “T was recently approached by a 70-year-old woman whohadlost 60 percent of her money in less than two years,” said Al Foschini, a financial services professional and branch sales manager with Bankers Life and Casualty Company, a life, health and annuity provider that specializes in senior Americans. “She had been advised As people approach retire- ment age, they need to recon- sider investment strategies. to put 100 percent of her savings into aggressive mutualfunds.” Foschini heads the Bankers Life and Casualty Company Hart- ford, Conn. branch, which means he hears these kind of stories from seniors every day. His solution is to utilize a risk tolerance survey to determine what types of investments will be best for an individual’s specific retirement needs. “The improper allocation of assets is the number one reason investors see these kind of losses,” Foschini continued. “I can’t say enough times, spread assets over multiple categories with acceptable levels of risk, especially if you are in or approaching retirement.” Foschini also encourages se- niors to look into fixed-interest annuities as an investment. annuities have better yields and higher interest rates,” said Foschini. “More importantly, they can offer the security to let you sleep at night without worry about market fluctuations.” Another important thing to consider for retirement is life, health and long-term care insurance. Americansare living longer today than ever before, which also means they’re spending more on medicine and medical procedures as they age. According to the Health Insurance Association of America, 40 percent of Americans over age 65 may spend time in a nursing home, and 75 percent will likely need some type of home care. The average cost of care in a nursing home is more than $52,000 annually. Conversely, such insurance policies are regularly considered discretionary. The state of Connecticut last year reported the first declines in the sale of longterm care insurance policies since it began tracking sales. According to Foschini, “Don’t run away from insurance because of the cost of premiums. Insur- ance is always an important part of retirement planning.” For moreinformation on retirement in a down economy, contact a licensed financial services professional in yourarea.

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