Economic uncertainty has consumers worried about financial investments

PHILADELPHIA (WPVI) — As recession panic rises and stocks continue to take a nosedive, consumers are increasingly worried about their 401Ks and other investments.

The S&P500 was last at this price just this past September so we have been here before and recently. But there is still major concern.

We talked to a woman who set aside part of her salary for many years putting the money in what is called a deferred income account. Now she’s getting ready to take her first distribution this month just as the market is tanking.

“The account has dropped in the space of three weeks it’s $400,000 less than it was.” It’s terrible timing for Sheri Woodruff.

“I turned 60 this year and this is the first year that I decided long ago that I was going to start to take my 1/10th,” she said.

The way the deferred income account works Woodruff will take 1/10th a year for 10 years. And after deciding a decade ago to start the withdrawals now, she can’t change it.

“When I get my check, for the purposes of our math, it’s $40,000 less for this year,” said Woodruff.

Forcing Woodruff to figure out how to make that less-than-anticipated amount last the entire year.

We went to a financial advisor for help for people concerned about their 401Ks and their retirement.

“You have every right to be a little nervous, a little concerned, but you should also be patient,” said Stephen Kates of Bankrate.

If you’re five or more years away from needing your investment money, stay put.

“Potentially rebalancing or readjusting, to take advantage from moving from more conservative assets like bonds into stocks, because they are now lower priced,” he said.

If you’ll need your investments in the next five years you should have already moved away from stocks, especially tech stocks.

“What you should consider here is what your income needs are going to be in the next 12 to 24 months and start to figure out, how can you best shore up to that,” said Kates.

“So I’m going to sit tight in other areas of the market where I can,” said Woodruff.

But she knows not everyone can do that.

“This idea oh, well, things will get better for some people that may not come soon enough, and that’s my concern.”

But there is hope. Kates does see light at the end of the tunnel. He said even if we do dip into a recession, he does not anticipate it will be for very long.

He said earnings growth projections are still relatively healthy and he expects the President will introduce tax cuts and other tools to improve the market later this year.