Does that headline gain your sympathy? Does it reflect the challenges facing average retirees? Now, the rest of the story.
When John Fitzgerald retired as a police lieutenant about three years ago after 33 years on the force, his deferred compensation plan was worth about $1.7 million.
These days, due to the stock market pullback, it is worth about $1.3 million. The 61-year-old Brookeville, Md., husband and father of three is concerned as he’s counting on that money to help fund his lifestyle.
“I see my hard-earned money slipping away every day,” he said.
Mr. Fitzgerald considers himself fortunate as he also has a roughly $6,900 monthly pension after taxes and insurance. He has about another $350,000 saved in other accounts including bank accounts and a college savings fund.
So far, he and his wife, Jill Fitzgerald, 58, haven’t made any changes to their portfolios. Mrs. Fitzgerald works as a writer and editor and has about $400,000 saved for retirement.
The couple is feeling the effects of inflation. They help pay the college tuition for their youngest son, a bill that they expect to rise roughly 5% to about $35,000 this fall.
In total, Mr. Fitzgerald estimates they pay about $12,000 in monthly expenses including mortgage payments for their Maryland home and a Delaware beach house. The couple has about $400,000 in debt including mortgages and car loans.
They have cut the amount of groceries they buy, but their bill jumped to about $600 a month from about $300 a month, he said. They have eliminated favorites such as bagged salads as the roughly $4.59 per bag price isn’t worth the recent $2 price increase, Mr. Fitzgerald said.
Looking ahead, Mr. Fitzgerald would like to sell his Maryland home in about four years and move to Florida to save on taxes.