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The enduring debt ceiling debate in Washington, D.C., is making a growing number of people here in New England concerned about their retirement savings.
John LeBlanc, a financial advisor at Modera Wealth Management in Boston, said clients have been calling to ask about the threat to their portfolios.
"Almost all the clients who are nervous are older," LeBlanc said. He tells them to 'stay the course.'
"We’ve only had one client who wanted to reallocate their portfolio," LeBlanc said.
But that number could rise quickly as Washington politicians continue to bicker ahead of the fast-approaching deadline.
Richard Shortt, a 66-year-old retiree from Somerville, has already taken his retirement savings into his own hands.
"I guess the reason is really that I don’t know how this is going to play out," Shortt said, sitting at his dining room table in a second-floor apartment. "We’re playing a roulette wheel on some level. I just don’t know what’s gonna happen."
Shortt says he’s heard all the same news reports you have about the debt ceiling. About how the nation’s credit is just so crucial. About how there’s just no way those D.C. politicians would let the deadline pass.
But he’s also been listening to what the Republicans and Democrats are saying.
"It sounds like trying to work on a peace agreement between Israel in Palestine," Shortt said. "You dance around it like you’re so willing and all that, but nothing happens."
Shortt thought to himself: 'You know what? They are gonna screw it up!'
He can’t afford that. His retirement savings, like a lot of people’s, took a big hit during the financial crisis a few years ago. Remember, that’s when a lot of things happened that people said would never happen. So this time, before anything could happen, Shortt decided to liquidate.
"I probably moved 10 to 15 percent of my stock holdings into cash," Shortt said.
That’s enough for him to live on for a while, but it’s not everything. It's not all his retirement savings.
"That doesn’t mean that if things get worse I won’t do more, but I’m not panicking!"
Shortt thinks there won’t be a complete disaster, but no real solution either. He’s banking on at least a partial default on the nation’s debt. Or maybe a temporary band-aid agreement, or that credit agencies would downgrade U.S. debt anyway.
Now Shortt knows that if he’s wrong — that if there is a lasting agreement and Wall Street rallies next week — he’ll lose money by having taken it out of the stock market. Even so, he’s not hoping for a failed compromise.
"No, I don’t want it to be worse, I want it to be better," Shortt said. "I don’t mind losing money if it’s turns out to be better, to tell you the truth."
But at this point, Richard Shortt doesn’t have faith that both sides are going to look past their political interests to do what he thinks is best for the country. And that’s why the 66-year-old from Somerville is trying to protect his retirement.
This program aired on July 29, 2011.
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