LOUISVILLE, KY (WAVE) - With company pension plans mostly a thing of the past, the drastic downslide of the market is likely impacting your retirement plans. Many workers have their retirement savings tied up in 401K's. WAVE 3's David McArthur sought advice on how to ride this out.
It is tough watching those balances drop and Thursday's new low for the Dow does not help matters. WAVE 3 talked with John Roberts, a vice president of Hilliard Lyons Research. He offered this piece of good news - maybe we are getting close to the bottom.
Keeping up to date on the market from his office in Louisville, Roberts says that we have never seen anything like this in the stock market before, at least not in our generation. He has his own theory on how low it might go.
"7,100. That's my thought on what could be a potential bare bottom low on the Dow. High 6,000, low 7,000 range which would give you another 12% down from here at worst. I hope that is bottom, but you never know," said Roberts.
Roberts' colleagues are very busy these days calming the fears of clients. The advice depends very much on your age.
"If you have 50 years to go you can make it through something like this, if you got 5 years to go you can't," Roberts said.
If your closing in on retirement with a 401K, Roberts says you will need to rethink your plan.
"There is not a heck of a lot you can do at this point. You either have to push out your retirement age - work another 2 or 3 years. That certainly is painful. Or you have say I will have to live on less going forward."
A little further out you may consider some investment changes.
"So certainly as you near retirement age you have to shift more assets away from equities and into fixed income - bonds, which are less volatile. Problem is even bonds have had a very poor year," said Roberts.
If you still have decades to go until retirement, Roberts says the best advice is still to wait it out and find some comfort you are in good company.
"I have seen similar declines in my 401K as everyone who is sitting out there and it is very painful," Roberts said.