Doug Deckman:Money Magazine recently listed a website, energyguide.com, that finds the natural gas and electric energy providers in a given zip code and lets you compare their prices. I was able to save $100 off my annual gas bill using this site.”

Allan S: “I am a university professor, 62 next June, making $52,000 a year, planning to retire at 65 (certainly not later than 67) with currently $78,000 in TIAA and $542,000 in Vanguard Index funds. I have three years to try to get my retirement fund to around $750,00 and do not have ten years to recoup a major fall in my assets. I see NASDAQ going into a classic bubble, the S&P heavily weighted with tech stocks, and all the ingredients for a major downturn that may spread worldwide through the stock markets. To get stocks back to reasonable valuations, I think that we may see 5% rates of returns for the next decade, even if the US economy grows at 3.5% and the CPI at 2.5% over that period. I am VERY nervous! I feel like bailing out of the market until next June to see what happens from the sidelines, but I did that once before and probably lost $80,000 and 5% of $750,00 isn’t going to maintain my current standard of living. It is this very short time horizon in what looks to me to be a very unstable situation that makes the usual advice — it will all work out in the long run — difficult to follow. Any advice for the many of us who are near retirement and don’t want to have to stay working into their seventies if we get caught by a Stock Market Tsunami? ”

I think you are right to be cautious, and, given your circumstances, would consider putting a chunk of the money in something a lot safer. Then again, you’re going to be around for another 30 years, at least, so . . .

  1. Plan to work longer, even if in a different capacity (part-time consulting? textbook-authoring?).
  1. Don’t exit equities altogether. But for money that’s not taxable, consider switching into things like a basket of relatively high-yielding REITs and utilities (if you have the temperament to study a bit and choose them sensibly) and less-puffed-up indexes than the S&P.
  1. Save as much as you can these next three-to-five years, for two reasons. First, to build your assets. But also so that, as a consequence, you may discover ingenious and relatively painless ways to reduce your cost of living — not because you have to (which is a drag) but because you want to (which is a challenge).

Good luck!

Tomorrow: Important Things to Know

 

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