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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Retirement Plan Participants Adopt More Sensible Spending Habits to Cope with Market Volatility

Retirees less likely to reduce spending on luxury items: Survey

| BY Donald Liebenson

Retirement plan participants have been most likely to adjust their spending behaviors during the recent stock market volatility, according to a new investor survey conducted by Millionaire Corner.

Beginning with the debt ceiling debate last August and subsequent debt downgrade, the stock market fluctuated up or down by more than 100 points in one day nearly three-quarters (71 percent) of the time, CNBC reported last month, and some analysts are warning of greater volatility in 2012 due to the ongoing European crisis, the prolonged economic downturn in the United States, and the increasingly partisan political climate due to get stormier with the 2012 presidential elections.

Individuals with 401(k)s have shown a greater tendency to adjust their spending behaviors to help cope with the market swings, our research found. Of the respondents who said they had curtailed spending on luxury goods such cosmetics, apparel and technology, 40.5 percent were retirement plan participants compared with nearly 31 percent who do not have a 401(k).

They were also more likely than those not invested in a retirement plan to be using products longer, or who are being more selective on when to upgrade, 50 percent vs. 45.2 percent, respectively.

Retirement plan participants are almost more likely to be purchasing less expensive products as a way to cope with the recent stock market volatility. Just over 36 percent have adopted this strategy as opposed to 27.1 percent of those who do not have a 401(k).

But those with and without a 401(k) are similarly selective in their shopping and watching for deals and sales.

Respondents who are still working or who identify themselves as semi-retired are being more cautious with their money than those who are retired. Just over 40 percent of those we surveyed have cut back on luxury items, compared with just over 27 percent of retirees.

Likewise, they are more likely to get the most use out of their products or to be more selective in which of their products they upgrade than retirees (50.4 percent vs. 44 percent, respectively). They are also purchasing less expensive products.

Not that retirees are completely spendthrift. They are as equally dedicated as those who are still working to report being more selective in their shopping and keeping an eye for the best deals.

About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.