Stock market tumble has people close to retirement worried

Stock ticker. (Image credit: MGN Online)

By the end of trading Wednesday, the Dow Jones was down 249 points, another drop after weeks of falling prices. "If you need to spend money from your stock investments right now, it's not a good time," said certified financial planner Laurence Egle. He is the president of the Financial Planners Association in Austin, and owns Eagle Harbor Financial in Round Rock.

His advice? Don't panic. "I recommend investors never change their long term plans in reaction to short term events," he said.

The tumble in the stock market this year is triggered in part by the oil bust. Today, a barrel of oil closed under $27 a barrel. Its bad news for Texas, but it's not the first oil bust we've seen, and it's not the first rough patch for the stock market either.

"2008 was horrific, our financial system was in disarray, currently the US economy is actually not that bad," Egle said.

Even if you are close to retirement, you should be OK, so long as most of your money is in bonds right now. "When you have the inevitable declines, you can ignore that," Egle said of long term financial planning. He recommends as you get closer to retiring, more of your portfolio moves towards the more conservative bonds over stocks.

For the rest of us, you might buy stock, if you don't mind the risk. But more importantly -- save your pennies. "I recommend any client has an emergency savings fund, 6 to 12 months of future expenses and that's going to be kept in a savings account," Egle said.

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