Recession forces new savings strategies

BUFFALO, N.Y. (WIVB) - Have you had the courage to check your 401k lately, or how about a college investment account?

The recession is forcing many people to come up with new savings strategies.

The worldwide money meltdown has cost American workers and investors hundreds of billions of dollars to investment portfolios, pension funds, and retirement savings.

Former sales executive Dan Hoffa has seen nearly half of his nest egg just disappear, forcing Dan to put off retirement for a few more years.

Hoffa said, "Obviously, I have a little more time to do it now."

So if your 401k, college savings plan, or stock portfolio has gone up in smoke, what do you do with what's left of your money?

Alice Rogers said, "I would put it in a money market account, because you are not going to make anything."

Alice Rogers of Amherst, and her late husband did pretty well with their savings, but Alice says she is just parking her money in low interest bearing accounts, for protection, "I am back where I was ten years ago. That's how bad it is."

Retired school teacher Betty Binder has a very conservative portfolio, with most of her money in safe, government-backed and insured securities, such as bonds and Certificates of Deposits.

Binder said, "I have lost, but I haven't lost as much, because I wanted to stay conservative, and make my money work for me, and not lose it."

Al Sanstrom also likes CDs and savings accounts. After losing $90,000 dollars on various financial ventures, Al sold his house, and went back to the safety of low yield accounts at his credit union, which is offering better CD rates than banks right now.

Sanstrom said, "I put some in a one year CD. I put the other portion in a six-month CD, and I put the rest of it in my savings account."

Al's strategy was a higher rate with the one year CD, more flexibility with the shorter one.

Richard Schroeder said, "We've had two terrific months in the stock market."
But financial advisor Richard Schroeder says April was the best month in six years for stocks. So, if you have the courage, now might be a good time to get back in.

Richard Schroeder of Schroeder, Braxton and Vogt said, "I think the economy has either hit the bottom, or is close to it. The stock market might go down again and re-test it's lows, one more time, but I think things are clearly better than they were last October."

Even if you believe these last two months have been a "Fool's Rally" on Wall Street, and the recession is still far from over, moving your money now would be tantamount to buying high and selling low. You might also want to think about government "I Bonds." They are safe and indexed to inflation.