Retirement no Longer on the Horizon for Many

Just when you thought you could finally retire, the bottom falls out of the stock market, taking the vast amounts of retirement savings with it. Unfortunately, for many, this was not just a 'make-believe' scenario put forth to prove an elaborate point. It's actually happened to thousands of everyday people. Individuals – especially baby boomers – that had chosen to defer retirement for a few years are now being forced to continue working for a considerably longer period of time. Conversely, those who've retired in the last two years are faced with an even greater challenge. To illustrate, here's one person's account of how early retirement affected her:

"As one who retired a couple of years ago at age 57, I have since watched my 401(k) plummet by more than 30 percent. Given that my pension is inadequate and I have not yet reached age 59 (which would allow me to roll my 401(k) into an IRA account), I'm now between a rock and a hard place. My only recourse is to borrow from my 401(k) so that I'll be able to take care of my expenses.

"Although experts strongly advised against this action, I know that there are many others like myself who are in similar straits and need a 'cushion' for the road ahead. While I did only borrow a small percentage of my funds, I still have to pay it back within five years. But, there is another option that I may be forced to utilize. If the economic situation continues to get worse, I might have to default on the payments. This would cause the loan to be considered a distribution, and I would have to pay income tax on the borrowed money next year."

Just a very short time ago, no one is his or her right mind would have predicted that the stock market was headed for a 5000-point plunge. But when it indeed happened, the 'dominoes began to fall.' Major banks and brokerage houses began teetering on the edge of overnight ruin. Unemployment has risen dramatically, lending has been virtually frozen, and countless numbers of people have lost much of the money they've earned through hard work and sacrifice.

Only five short years ago, retirement was still thought of by most as a time when one could enjoy the grandkids, travel or simply do the things that they had always wanted to do. However, when this crisis began, many of us instead began to take a hard look at our spending habits and make adjustments. Perhaps you had to make some serious decisions regarding your household budget; you may have even had to take on a second or third job. Many may have lost the college tuition savings for their children. Others have been given a pink slip from their employer. The final blow probably came when you realized that you could no longer retire when you had originally planned – or anywhere even close to it.

Nevertheless, when faced with such adversity, we as a people will find the inner strength and perseverance to conquer this and other challenges that may come. We've done it before; we can do it again. Remember, we're all in this together.

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