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How Retirees Can Protect their Portfolios

May 19, 2020

From the Kiplinger website

Bear markets can be nightmarish for retirees. Unlike their younger counterparts, retirees don’t have years to recover their losses. If they are forced to sell beaten-down stocks and mutual funds to pay the bills, they could inflict permanent damage on their portfolios, increasing the risk that they will outlive their savings.

That’s what happened during the Great Recession. Standard & Poor’s 500-stock index lost more than half of its value during the bear market of October 2007 to March 2009, and IRAs and 401(k) plans lost about $2.4 trillion in value just during the final two quarters of 2008. Investors who rode out the downturn recouped their losses in the 11-year bull market, but seniors who took withdrawals before the stock market recovered were left with locked-in losses.

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