The latest Consumer Reports retirement survey shows that in the wake of big investment losses many have turned to “Plan B” to strategize and rebuild their retirement nest egg. However, making up the loses won’t be an easy task, 51 percent of retired readers and 55 percent of those just short of retirement are facing investment losses of at least 20 percent in the past 12 months.
The Consumer Reports National Research Center surveyed more than 19,000 Consumer Reports online subscribers between the ages of 55-75 and found about half are making strides to generate more cash. This group is eating out less, cutting back on entertainment, and about one third have cut their credit card use and spent less on things like groceries and other household goods.
"When bad investments happen to good people, they have to work harder to slash debt, cut spending and save more. Switching to Plan B means seizing the reins in every areas of your financial life over which you have control," said Noreen Perrotta, Consumer Reports Money editor.
The Consumer Reports Retirement Survey also found that consumers who planned ahead were more satisfied with their retirement prospects, even in the current economic climate. Among pre-retirees 90 percent planned ahead by reading books or articles, consulting professionals, using online software, taking courses or conversing with family and friends. The more planning methods used, the more satisfied the respondents were.
The 2008 report also showed that using financial pros gave people planning for retirement no edge. Unlike last year’s survey, those who reported using financial planners this year said they were no more satisfied than those who educated themselves. Both groups said they lost money at about the same rate.
The results of the survey are included in Consumer Reports February issue which includes a complete guide with 17 moves to help retirees and briefly mentions reverse mortgages as something pre-retirees should look into.