Stocks’ gyrations rattle new or soon-to-be retirees

Tennessee. “There’s a huge fear of folks my age that they’re going to run out of money and they’re going to need to rely on the government for help.”

By the time the market bottomed out in March 2009 during the financial crisis, an estimated $2.7 trillion had been wiped out of Americans’ retirement accounts, according to the Urban Institute. Older Americans, in particular, have had a tough time recovering their losses. The Pew Research Center estimates that the net worth of the median baby boomer household in 2016 was still nearly 18 percent shy of where it sat in 2007.

In the two years since Donald Trump’s election, 62 percent of Americans — and 76 percent of those 65 or older — don’t believe their financial situation has improved despite the run-up in the stock markets, according to a recent Bankrate survey. Nearly 1 in 5 respondents said their finances have gotten worse.

Paul Kelash, vice president of consumer insights at Allianz Life Insurance Co., said the market fluctuations throughout 2018 look less like the prelude to a retirement-savings crisis and more like a return to normalcy after a remarkably steady market run.

As such, he hasn’t seen much evidence of Americans drastically altering their retirement plans. “We get the feeling that folks are getting more comfortable with volatility,” he said.

Patterson gradually began stepping away from his law practice in 2016 — a decision he said was motivated in part by the stress of his job, his relatively stable finances and a “re-evaluation of priorities” after losing his wife of 35 years in 2013.

Now, 68, Patterson said he still has some “discretionary spending” money invested in stocks and riskier assets. But he said he was reluctant to put too much money into a stock market that soared throughout 2017, a decision he said was driven in part by memories of the 2008 financial crisis.

“I can retire in 2018 and not be sweating bullets because I put together a budget, and I protected it,” Patterson said. “The thing that the crash in 2008 taught me is that, even though my portfolio was well set up, that was a black-swan type of event. Even if you had a balanced portfolio, everything went down.”

And with a limited number of working years ahead of them — and, in some cases, their peak earning years largely behind them — many older Americans haven’t managed to replenish their depleted retirement and savings accounts.