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Quality retirement still within reach

House Speaker Nancy Pelosi appears with Rep. Barney Frank (left) Sen. Christopher Dodd (right) before signing Financial Reform Bill Thursday.

House Speaker Nancy Pelosi appears with Rep. Barney Frank (left) and Sen. Christopher Dodd (right) before signing the Financial Reform Bill Thursday.

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Updated: May 3, 2013 12:15PM

It was only five years ago that people were regaling me with their plans for "early retirement" at age 62, or 60, or even in their 50s! After all, back then, their 401(k) portfolio was soaring, and so was the market value of the family home.

What a difference a recession and market crash have made on the national psychology! Now people are asking: "Will we ever be able to retire?

The answer to that question triggered a new edition of my latest book, The NEW Savage Number. And the answer remains the same: Yes. You can and will retire -- but you will have a different definition and time frame for that decision.

The question has changed from "How much do you need?" to "Is it possible?" But just as Americans were too optimistic about their retirement prospects a few years ago, I believe we have become far too pessimistic about the future.

It's not "game over" for America -- or for your retirement plans.

I have not changed my fundamental belief in the future growth of the American economy, and with it the stock market. And the stock market is the one way you can have access to participate in all that growth and build your own wealth.

I'm not a market timer, as you'll know from reading my columns and books over the years. But when the extremes of either pessimism or optimism sway the greatest number of people, it's time to stand back and rethink your position.

The pendulum always swings to extremes.

In the last decade, we've moved from an extreme of optimism about having it all to an extreme of negativity about America's potential to survive and prosper. Now you see why it's so important to have a disciplined financial plan.

Let's agree on one thing: If the pessimists are correct, then it really doesn't matter how your investments are structured. If it's the end for America, then you don't need to worry about the value of your stock portfolio!

But before you give up on the future, take a closer look at history. America has been though tough times before -- and we've always come back stronger and growing. But every generation must learn this for itself. It's not just the lessons of the Depression in the 1930s, which now seem like ancient history.

Those now under age 50, who are shocked by the current economic recession, don't remember the recession of 1980-1982. That was an equally scary time -- when the prime rate was 21 percent, mortgage rates were 15 percent, both unemployment and inflation had reached double digits, and the Dow Jones Industrial Average was under 800!

But America came through those tough times -- and soared to a new era of economic growth based on productivity created by technology. In that dismal recession of 1981, few would have guessed that within 20 years the stock market would trade higher than 14,000 or that Internet technology would revolutionize the way we work, live and learn.

History never repeats exactly -- but it does teach us lessons. This has been a different kind of recession from any we've seen before -- because it is fueled by an unprecedented level of debt -- something I have warned against in all of my writings for the last 20 years! So we'll need a different sort of resolution.

Remember Newton's law of physics that you learned in high school? For every action, there is an equal and opposite reaction. Excesses of debt must unfortunately be wiped out, creating an excess of pain for those who overborrowed. If America can get through this process without losing the free markets that created such wealth throughout our history, then we will be setting the stage for the next period of real growth.

It is never possible to know the future. Forecasts, predictions, and prognostications are always impacted by current events. It is our job to plan for all of those eventualities -- whether ongoing economic slowdown or the next boom that will be triggered by an invention yet unknown.

And we must also be prepared to survive mistakes made by well-meaning politicians and economists. No one political party or economic theory has a monopoly on good -- or bad -- ideas. But we know that economic growth requires a currency that retains its value, laws that protect the value of assets, and markets that can be trusted.

That's what The New Savage Number is all about -- creating your own financial security that will help you ride through the tough times, even in retirement. Now it's more important than ever that you understand the risks -- and potential rewards -- of your investments, and your entire financial plan. So let's get restarted!

No matter what your age, take a fresh look at your plans for the future. Because, no matter how late you start, your future will be so much better if you prepare for it now. And that's The Savage Truth.

Terry's new book can be ordered, signed and personalized at www.Terry, in paperback, for $11.50 plus shipping; or get it in bookstores or at

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