Current Events > Wouldn't peoples retirements tank if the stock market tanks?

(+) Yeah! (+)

How does this affect people who just leave some of their retirement in a savings account?

If you are decades from retirement any crash is a small blip on your growth towards retirement.

If you are years from retirement or less you should have most of your money in safer investments, largely unaffected by market crashes.
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A catastrophic crash would really badly wipe out most of our pension funds, yes, but there are lots of safeguards in place that pretty much prevent that from happening nowadays, barring nuclear war or something!

ArchiePeck posted...

A catastrophic crash would really badly wipe out most of our pension funds, yes

That's more a problem with how pension funds are run, though. If you promise people an amount of money based on the assumption that the fund will return 8% a year forever, eventually the whole system will come crashing down.

Also people gaming the system, but that's another discussion entirely. Like some pension benefits were based on your pay the last three years of service, so you would get janitors near retirement working absurd overtime hours their last three years and then collecting $300k a year in retirement for the rest of their life.
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Yeah if you're invested in something that loses value then your investment will lose value.
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