Those on a fixed income may have planned on a modest return from bonds, but those modest returns are even more humble now with the tumultuous economy. While some seniors have to adapt their lifestyles, others are going to have to put retirement on hold.
Work is picking up at Cicero Development Corporation. The Plainfield hotel renovation business endured huge staff reductions and customers that were faced with financing challenges. The company is surviving, but the founder and president, Sam Cicero, Sr., has had to put retirement plans on hold.
"If you could see the light at the end. But one day you'll see the light the next day it's out," Cicero said.
Retirees gathered at Monarch Landing in Naperville to talk about the economy on Thursday.
'It's not a happy thing to see your money go down. I worked for 51 years," Elaine Brinkman said.
People close to retirement have traditionally been advised to have more invested in bonds rather than stock. That may limit exposure to the wild fluctuations of the market, but bond are seeing lower returns and are expected to remain low.
"The one thing I do caution is that you don't stretch for yield, you don't look for things like high yield bonds and other riskier securities because you're used to a six percent interest rate," Scott Burns, Morningstar, said.
Burns is research director for Morningstar, an independent investment research firm. Burns said while bonds and bank savings accounts may have low yields, some return is better than none for those on fixed incomes.
"Our retirement is to retire on, it's not to make us millionaires. We want to invest that appropriately and put our risk capital in separate bucket," Burns said.
A retired social worker at Monarch Landing said he practices moderation and patience in all things, especially when it comes to money.
"I'm gonna wait until things hash out before I make any adjustments," Martin Godoy said.
Mary Ann Rickert, a retired nurse ,says she saved prudently for her retirement, but she worries about her kids.
"We've raised our children to want instant gratification. And [they have] not learned that they have to save and get things when they can afford them," Mary Ann Rickert, retiree, said.
Many of the retirees we spoke with grew up with parents of the depression and mirrored their parents frugality and attention to savings. They already know what it means to rein in spending.