"We get calls today from people who will have to work way beyond [age] 65 because they waited too long to wake up."
Gene Jencarelli, 72, of Miami said his retirement plans were derailed the last time the stock market wobbled in 2002. Jencarelli, who invests in securities through his IRA, had to get a part-time job taking bets at Calder Race Course.
Jencarelli follows the markets closely but was caught off guard by the sudden failure of mortgage lender IndyMac in July and the recent problems at AIG, which cost him several thousand dollars.
While he has fared OK so far and decided to ride out the storm, when the market rebounds his gambling is over, he says. "If the thing goes up again, I'm just going to withdraw it all and just get the heck out," Jencarelli said.
Adding to the challenge is that today's seniors are living longer than ever. Ruth Schwartz, 96, of Hollywood, who was waiting for a bus outside a senior center Wednesday to return to her Hillcrest condo, said she has not invested in stocks but is coping with rising expenses.
Still, she remembers the Great Depression, when her mother used to put on a pot of boiling water to pretend she was cooking because there was nothing to eat. "But we managed," said Schwartz, who has "two lovely daughters," one of whom is 62, the other 71. "I'm happy to be alive at 96," she said.
Despite the current upheaval, many financial advisors urge investors to hang on to their stock holdings -- assuming they are in fundamentally solid companies -- so they have time to recover.
Recent retirees Ed and Mini Vasquez of West Kendall feel fortunate they don't have to touch their government-sponsored 403(b) retirement plans and Roth IRAs, which plunged about 20 percent in value in the past 14 months.
STATE PENSIONS
Instead, the couple has begun drawing on state pensions from their years working in higher education -- Ed at Florida International University and Mini at Miami Dade College. "We don't need the money to live on right now, thank God," said Ed Vasquez, 65.
Vasquez, who taught courses in finance and economics at MDC, said he and his wife switched long ago to index funds from individual stocks and believe their well-diversified portfolio mostly protect against market swings. As a result, he plans to stay the course.
"Running for the hills at this point isn't a good idea for anybody, unless you are in a lot of highly volatile stocks or funds, in which case you should have gotten out a year ago or diversified," Vasquez said.
Starner, the Raymond James financial planner, advises clients in retirement that they should keep cash reserves to cover two years of living expenses "so if the market is like this, you don't have to sell." But that's a lofty perch many retirees can only dream of.
For the average older person, delaying retirement or going back to work may be the most effective options.
The upshot will be higher Social Security payments later on, more opportunity to save money and fewer years dependent on retirement income. "It's a really powerful decision to make, and people are healthier now and jobs are less physical," Munnell said.
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