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Financial planning for retirees

READ MORE: Financial planning for retirees
The stock market dropped between 7 and 8 percent yesterday, making it one of the biggest losses we've seen since 1987. That means a large chunk of change was lost in mutual funds and money markets that make up a portion of all of our retirement savings. David Kingman hopes to retire in the next 10 years, but with the drastic drop in the stock market, thousands of dollars of his retirement saving are now gone. “The 7 percent affect us and a lot of people in a lot of different ways." While he lost thousands of dollars in his retirement portfolio, others lost almost everything. "Think about all those people that had Wachovia stock, and what happened to them and AIG and all the different bail outs." Kingman said. Financial advisor Ross Marino said this downward spiral began a year ago when people began buying homes they couldn't afford, which lead to more borrowing from the banks and eventually, foreclosures. Marino said, “We've now come to a point where people are nervous about buying and selling and banks are nervous about issuing new mortgages and when that happens no body buys anything and the economy shuts down." He said if your retirement was affected by the market, you may need to change your lifestyle and not withdraw as much. Or you're retirement may have to be pushed back so you can make more money, but Marino said this drop in the market isn't abnormal. “If you look at history on average this happens every 3 and half years, the stock market goes down over 20 percent we see a recession from time to time if you look at history this really is business as usual. It just doesn't feel like it when you're in the middle of it." So now for Kingman, it is a waiting game. "Again long term, what we hope is that the market will come back and our investments will continue to grow." Marino said make sure your investments are spread out between different companies, and if you're planning for long term retirement, anticipate a rise and fall in the market and ride it out because history shows it will come back up.

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