It's a New Beginning

In October 2007, the economy and stock market was doing great.   Early retirement seemed like a great idea.  Analyses of various scenarios showed that retiring early was unlikely to be a failure.

Now, three and a half years later, the world is very different from my expectations of late 2007.  The economy went into a great recession and the stock market crashed concurrently with significant declines in house prices.  My retirement and savings accounts were reduced by 40% before recovering to being down  about 25%.

Needless to say, early retirement for me has been a bumpy road :-)

So here's my new financial scenario for retirement:

Low investment returns returns.  Instead of 6-7% annualized returns, I'm counting on (hoping for:-) 3-4% returns.  Gone are the days of 8-10% returns that fueled retirement accounts over the past 20 years,

Lower Social Security and Medicare benefits.  Currently, I am not eligible for Social Security or Medicare and my age is in  the gray zone where benefits may or may not be reduced.  With the current state of the deficit, I expect my benefits will likely be lowered.

No returns from  housing.  I am planning on little to no gain from the home we own.  In fact, I hope it's worth more that we paid for it when we sell in 15 years :-)

Retirement in the next 15 years won't likely be as "easy" as retirement was in the 15 years prior to the Great Recession. The past three years have been a difficult lesson in retirement economics.  We've adjusted our retirement plans significantly and in 2013, we'll learn if the right adjustments were made.

For more on  New Beginnings, check back every Sunday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

 Copyright © 2011 Achievement Catalyst, LLC