The recent economic downturn and volatile financial markets have drastically reduced the retirement accounts of many current and future retirees. In a new study, a University of Missouri financial expert has found that many Americans choose to retire when the economic markets are peaking, an action that can, ironically, cause major problems for the long-term financial stability of retirees.
“Potential retirees often will first meet their targeted retirement savings goals during an up market and will be tempted to retire at that point,” said Rui Yao, an assistant professor of personal financial planning in the College of Human Environmental Sciences at MU. “The problem with this strategy is that the economy runs in cycles, meaning that after a peak, the market will take a downturn. People who have retired shortly before an economic downturn run a serious risk of losing a significant portion of their retirement savings, which will shorten the longevity of their retirement income. This could result in many retirees outliving their retirement savings and facing financial hardships toward the end of their lives.”
To read the full, original article click on this link: Retiring in Booms Could Cause Financial Hardship | ScienceBlog.com
