Storm Warnings

As the Northeast and Mid-Atlantic continues to recover from Hurricane Sandy, I was reminded that it was only a little over a year ago that Hurricane Irene came barreling up the East Coast. At that time we had just deposited my youngest off for his first semester of college, and then spent the drive home up the East Coast with Irene (and the reports of her potential destruction and probable landfalls) close behind. We arrived home, unloaded in record time, and went straight to the local hardware store to stock up for the coming storm. We weren’t the only ones to do so, of course. And what we had most hoped to acquire (a generator) was not to be found — either there or, at that moment, apparently anywhere in the state. What made that situation all the more infuriating was that, while the prospect of a hurricane landfall was relatively unique, we had been without power on several prior occasions, and for extended periods. After each I had told myself that we really needed to invest in a generator — but, as human beings are inclined to do, thinking that I had time to do so when it was more convenient, I simply (and repeatedly) postponed taking action. Life is full of uncertainty, and events and circumstances, as often as not, happen with little, if any warning. However, hurricanes you can see coming a long way off. There’s always the chance that they will peter out sooner than expected; that landfall will result in a dramatic shift in course and/or intensity; or that, as with Hurricane Katrina, the real impact is what happens afterward. In theory, at least, that provides time to prepare. But as I was reminded a year ago — and even as we made last-minute preparations ahead of Sandy — sometimes you don’t have time enough. I suppose a lot of retirement plan participants are going to look back at their working lives that way as they near the threshold of retirement. Advisors will certainly hope that they’ll remember the admonitions about saving sooner, saving more, and the importance of regular, prudent reallocations of investment portfolios – and perhaps that they’ll remember to do so in time for it to matter. Sure, you can find yourself forced suddenly into an unplanned retirement — in fact, retiree respondents to EBRI’s Retirement Confidence Survey have long indicated that they stopped working sooner than they had planned. [1. Twenty-five percent of workers in the 2012 Retirement Confidence Survey say the age at which they expect to retire has changed in the past year. In 1991, 11% of workers said they expected to retire after age 65, and by 2012 that more than tripled, to 37%. Those expectations notwithstanding, half of current retirees surveyed say they left the work force unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure (see “The 2012 Retirement Confidence Survey: Job Insecurity, Debt Weigh on Retirement Confidence, Savings,” here).] But most of us have plenty of time, both to see that day coming, and to do something about it. Ultimately, of course, what matters isn’t the time you have; it’s what you do with it. [2. A great place to start those preparations is to figure out what you’ll need, as millions of Americans have, with the BallparkE$timate,® developed by the research team at the Employee Benefit Research Institute. It’s available online at the Choose to Save website. Choose to Save also includes a wide variety of free tools and innovative resources, including free videos that can be used to share key savings messages with participants.]