Living To See Savings Again

Alice wants to give her retirement savings to her kids now, because she doesn't think she'll live to see the stock market recover.

QUESTION: Alice is 72, has no debt and has lost a third of her retirement savings. She doesn’t think she will live long enough to see the money recouped. Should she go ahead and give what she has left to her kids? Dave tells her why things aren’t as dire as she thinks.

ANSWER: Unless you have terminal cancer, you may live long enough. At 72, I know people who have a 10-year career ahead of them. If you just decided to die, I guess that’s your decision. Remember that 100% of the 10-year periods in the stock market have made money. The market is down; your broker didn’t mess anything up. I don’t know when the market will recover, but unless you plan on dying in the next couple of years, I’d say you could see it return. Just sit tight.