GREENSBORO — George Rettie didn’t take the bad news well.
“It was kind of devastating,” Rettie, a woodworker at a local building supply company, said Friday. “(But) I didn’t break down and cry or anything. I’m thinking, we need to put a plug in this leak.”
Rettie, 59 and single, had just read his most recent 401(k) statement. He suddenly feared that his nest egg would turn into a goose egg.
For the first nine months of the year, Rettie had lost nearly $40,000. Of that, $23,000 had disappeared in the last quarter.
“Ouch,” Rettie said.
Across the Triad this week, thousands of workers shared his pain. They’ve torn into their quarterly 401(k) statements, only to discover that they might have to work longer and spend less — if and when they do retire.
Many, like Rettie, wanted to take drastic action.
“There’s panic (out there),” said Michael LoNano, vice president of LoNano Financial Advisors. “People are worried about losing everything.”
LoNano’s company educates and advises the employees of about 20 Triad companies on the investment options for their 401(k)s, tax-deferred plans that are the most widely used retirement vehicles.
Over the past 15 months, according to congressional leaders, the stock market’s plunge has wiped out about $2 trillion in retirement savings.
That’s kept LoNano busy of late. Calls from worried plan participants have picked up about 100 percent over the past two months.
When Rettie called, he had to make an appointment for LoNano to call him back.
Rettie knew what he wanted to do; he just wanted some advice first.
“It’s time to put my 401(k) in a money market and freeze what assets I have left,” Rettie said. “It makes your face go white to see your potential retirement whittled away.”
When the two talked Friday, LoNano urged patience and fortitude.
“Those are in short supply,” LoNano said. “You don’t want to self-destruct by doing the wrong things at the wrong time.”
Across the Triad, other financial experts have offered similar advice.
They urge 401(k) participants to maximize contributions to their plans and make sure their allocations are appropriate to their age and tolerance levels.
And don’t sell at the bottom.
“If you haven’t sold yet, it is definitely too late to sell now,” said Don Jud, professor emeritus at UNCG’s Bryan School of Business and Economics. “I think it is always a mistake to reallocate within a crisis.”
And what about those scary 401(k) statements?
“Just put it away and forget about it,” said Jud, whose own portfolio has lost about 22 percent this year.
After talking with LoNano, Rettie agrees. He’s going to sit tight and wait for the recovery.
“I am pretty satisfied,” said Rettie, even after he learned Friday that his account had lost another $29,000 in the first 10 days of October as the stock market experienced a slow-motion crash. “It’s not worth anything other than the paper it is printed on until it is cashed in.”
Besides, Rettie says he likes his job and plans to work until he’s 70. So why worry? On Friday night, he decided to hook up with some friends and go dancing.
Contact Donald W. Patterson at 373-7027 or don.patterson@news-record.com
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