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In reply to the discussion: So what happened with the DOW today −457.21 [View all]Blue_true
(31,261 posts)much that person had invested before a big drop. If a person is going to need the money soon, they are simply better off in cash before a decline happens, that was my main point.
Say a man or woman is 53 years old at the time of a massive drop. The person would have to wait, by your number, 16 years not counting the effect of inflation to get back to the waterline. At the point the person surfaces, he or she will be 69. Is that catastrophic? It depends. If the person had $125,000 invested like most Americans, that person is going to face brutal hardships if a decline takes that investment to $62,500. There simply won't be enough money without help from SS and Medicare. But if a person had $2 million and that got taken to $1 million, at the time the person retires, he or she could chose at minimum to draw $50,000 per year in income for 20 years.
Like everything in America, people that are better off to begin with ride out problems better than those that aren't. Your situation sounds like you are toward the better off end, that is not the reality for the vast majority of Americans.