GREEN BAY (NBC 26) — For Al Krueger, a Winneconne resident, retirement means more family time.
“Our grandkids, I wish they were two doors down, but they're not," he said. "My grandson, he's actually in high school, and we watch all his basketball games, even though we're three hours away, but it would be nice to say, let's get in the car will drive down there and stay on overnight and watch him, you know, in real life. Instead of on the TV.”
Retirement also means more time for travel.
“In the next 10 years, we've doubled our travel budget," he said laughing. "Just because we like to do it, and you know, you've got to go when you're young enough. You don't want to be 85 years old and doing a cruise in the Greek Isles.”
A few years ago, Krueger told himself he would retire in April 2021. Almost a year has passed since that goal, and he’s still working.
“I'm thinking in the next year," he said. "So 2022 is my plan. It's going to be more of the mid to the later part of 2022.”
Inflation is just too big of an unknown right now, Krueger said.
“If inflation goes to 7 percent or 10 percent this year, and then goes back down to 5 and then 2, that's great. But what if it stays at 10 for a bunch of years here, and then all of a sudden you lose 10 percent off your nest egg every year?”
As the cost of living increases, the value of your dollars goes down. Retirement accounts aren't adjusted for inflation; over time, inflation reduces your 401(k) investment returns. But financial advisers have always said that some investments provide better inflation protection than others.
“The best hedge against inflation historically for decades upon decades has been stock," said Mike Macco, President of Macco Financial Group. “A company needs to remain profitable. They're publicly traded. So they'll do it and you know, they're going to pass along those costs to the consumer and maintain the profit margins.”
It's hard to advise retirees in 2022 though, he said.
“One of the the old axioms is that you should not have all your eggs in one basket," said Macco. "And so at this period of time when we have really high inflation, we also have really low interest rates. And so a lot of people who are close to retirement are already in retirement have a lot of bonds in their portfolio. Well, we saw a period of time last year where the the net yield from some bond investments was actually slightly negative, you know, like a much less than its historical average.”
For those still a while away from retirement, the money in your 401(k) will be valuable if you stay consistent with your saving.
“A good rule of thumb is to save 15 to 20 percent of your annual income," he said. "We have to start at some point. So maybe right now is not the best time to start, or maybe start small right? Start with 1 percent or 2 percent or 5 percent of your income and work towards that 15 to 20 percent savings.”
Krueger has done all he can for decades to plan ahead, he said.
“I've been super fortunate because I've been with my company almost 40 years," he said. "I came right out of college and got that job, and they had a really great 401(k) plan.”
But at the end of the day, it’s a careful balance of safeguarding your savings while leaving time to live life to the fullest.
“You could work your entire life but at some point, you got to look at, we're all going to have an end date," he said.
