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Many in Manatee assessing their 401(k)s


As the recession continues to kick around nest eggs, more financial planners are sitting down with their clients to re-evaluate retirement plans and goals.

Financial planners in Manatee County say they are seeing more clients nearing retirement coming in to assess the damage to their 401(k)s and shelve some of their post-career dreams.

“Everyone’s concerned, without a doubt,” said Mike Ohlman, a financial planner with Raymond James. “Obviously the longer this goes on the more people it’s going to affect.”

Retirement accounts have lost $3.4 trillion between Sept. 30, 2007, and March 6, according to an article in U.S. News & World Report.

Assets in retirement savings once valued at $8.5 trillion in September 2007, have fallen by 40 percent to $5.1 trillion.

The stock market’s toll on retirement savings means more financial planners are having to assess the damages with clients.

“We’re assessing the long-term impact of what the loss is going to do to each individual,” Ohlman said. “Of course, what impact that has on each individual family depends on how reliant they were on their investment income to meet their desired retired lifestyle.”

For many, the investment income has meant everything.

And as a result, local financial planners are seeing clients having to sacrifice travel plans, give up dreams of buying a vacation property or postponing retirement.

“With people close to retirement, some people are making the decision that now is obviously not the best time to retire,” said Tom Miller of Moseley Investment and Management in Bradenton. “They’ve seen their 401 decline, and some people who didn’t have some sort of protection on their IRA have seen a deficit. And they feel like they either need to put more money into the accounts, or are having to postpone retirement to put more money into retirement funds or until they see their retirement funds recover.”

These people aren’t alone.

A survey conducted by Harris Interactive in February found four in 10 Americans believe the current economic conditions will force them to delay retirement up to 10 years later than planned.

“Surely, there’s going to be some disappointment,” Miller said. “People had a lot of plans. They wanted to take vacations, they wanted to buy a vacation home, and those are either going to have to be postponed or pared down for the most part.”

Miller says prioritizing retirement goals and making sacrifices have become key strategies for preparing clients to follow through retirement in this recession.

“We start at square one and say, ‘What are your retirement goals?’” Miller said. “We see which goals are set in stone and try to get a feel of what is important to them. Sometimes it comes down to would they rather retire now and cancel that sailing trip, or would they rather retire in five years and still be able to do that trip.”

Mike Mott, of Mott & Associates in Bradenton, said he’s worked with some clients at reducing stock allocations due to Wall Street’s turmoil.

Instead, Mott said some clients are adding more cash and bonds to their 401(k)s to be on the safe side.

Mott said in this economy people need to consider if they have enough liquidity, cash or short term assets they can access initially when they retire.

“Right now, it’s a little bit like after the big hurricane,” Mott said. “You have to come in and assess the damages, take inventory of what you have left and basically plan for this moment forward rather than look backward.”