Posted by Tim Stobbs on October 27, 2008
Well despite my usual optimism about most things I do have to admit I’m a little worried about my best laid plans to retire at 45. After all my plan calls for a personal inflation rate of 1.5% and an average rate of return of 7%. So with the CPI closer to 3.5% and my likely return for the year closer to -25%. It’s a bit hard to see how this going to work out facing the math of any year with -25% return could really screw up an average even over 15 years.
Yet at the same time I have to admit I’m thinking this time period could actually make my retirement plans rather than ruin them. After all if I can managed to pick up the indexes when they are down and continue to selectively pick certain stocks to buy during the next year or two (or how ever long it takes for things to turn around). I could end up riding a big wave back up and recover my overall plan.
So rather than worry about which it will be in the end I’m going to keep my mind open. I’m not going to hide under a shell refusing to invest. At the same time I’m aware I should keep my investment purchases resonable in the overall context of my own life. I’m going to keep some cash on hand in case things get bad at my job (which is a bit of cocern of mine). I’m going to try and walk the middle path, which is often much easier to say rather than to do.
So how about anyone else? How has the last few months altered (if at all ) your plans to retire?