What now? Retirement plan strategies after the financial crisis.

• Author: Goodfriend, Karen
• Position: Financialplanning

many people have been reassessing their retirement plans in the nearly two years since the drama of the financial crisis unfolded with Lehman Brothers filing for bankruptcy and AIG facing the possibility of a similar fate.

During the latter part of 2008 and early 2009, financial doomsday scenarios seemed plausible and anxiety levels were high. While our economy is much more stable today, we often find our clients--and ourselves--justifiably concerned about the financial future.

There remains a sense of financial uncertainty; which makes it harder to plan for the future, yet it's now more important than ever to develop a proactive retirement strategy.

Consider the following:

* Those who are unemployed or fear losing their job may wonder how long they will go without a source of compensation. These individuals and those who plan to make job changes will wonder what their career and income level will look like in the future.

* The economic outlook shows many positive trends, although the rate of growth is uncertain, and possible setbacks remain. The magnitude and pace of economic growth will influence the future wealth of individuals and the financial health of businesses, large and small.

* To what degree will inflation erode purchasing power? Although not a near-term issue, the prospect of higher inflation in the long term is quite possible.

* Will the client's assets--real estate, business, investment portfolio--support their lifestyle?

Half Full vs. Half Empty

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Uncertainty tends to make individuals anxious and investors risk averse, both of which are rational responses. However, the adjustments the financial environment made to the economy--and the resulting impact they had on individuals--can be viewed with some positive perspective.

The crisis and recession served as a wake-up call to consumers and created an opportunity for better financial education. The U.S. consumer savings rate was disturbingly low before the crisis and has since improved. Today, frugality is "in."

Individuals have the opportunity to learn from past mistakes and become more successful investors going forward. In one decade, we have seen the bursting of two major bubbles: tech stocks and real estate.

These two very different investments have common denominators of behavioral traps to which individuals easily succumb, namely emotion. Before the crisis investors were caught up in counterproductive thought patterns, such as overestimating their...