Q: There are a lot of us who are two to five years from retirement. We have large sums in the stock market — 60 percent to 70 percent...

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Q: There are a lot of us who are two to five years from retirement. We have large sums in the stock market — 60 percent to 70 percent of our savings.

What are your views on the effect of rising oil prices on the stock market in the short term (one to two years) and the long term?

Having been through the dot-com bust and lost 35 percent of value, I am nervous about riding the waves this time.

A: We can’t control the stock market. But we can structure our investments to avoid the forced sale of stocks (or other assets) in a down market.

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The day-to-day price of stocks is not very important. What is important is the price of the stock on the day we need to sell it.

That’s why everyone should have a small cash cushion that will cover life’s smaller nasty surprises.

It’s also why retirees should favor having a laddered portfolio of individual fixed-income securities over owning fixed-income mutual funds.

In my view, we’re a lot safer owning a ladder of five-year Treasurys than an intermediate-term bond fund.

With a fifth of the portfolio maturing each year, you can recover your investment at face value automatically each year.

Suppose, for instance, your nest egg is equal to 10 years of what you spend over and above Social Security.

If your portfolio is 50 percent fixed-income and 50 percent equities, your fixed-income ladder will have five years of the cash you need without forcing you to sell stocks in a down market. That gives you five years to wait for a recovery.

My personal bet — and it is only that, a bet — is that energy prices will have to rise a great deal to slow our economy. As I have pointed out in other columns, gasoline is still one of the smallest expenses for operating a car.

Operating a car, in turn, is a pretty small part of our total spending.

As a consequence, I think stock prices won’t be threatened until there is a material increase in both short- and long-term interest rates.

Q: My husband’s industry (paper) and age (58) are against his ever being substantially employed again. We have 40 percent of our savings in laddered CDs and 60 percent in stocks. Also, my employer isn’t looking so hot either.

We have a very moderate house for sale in Houston and may break even if it sells. We’ve also had a bad case of wanderlust, have RVed before by choice and have moved numerous times with his job. We can live below our means.

We are being forced out of the middle class. I am paralyzed. Should we start selling stock now?

A: No. Here’s a quick action plan. First, get estimates of your Social Security benefits at age 62. Second, dedicate a portion of your laddered savings to provide that amount of cash each year until then. This is your bridge to Social Security.

Your reasonable lifetime income from your remaining nest egg is 4 percent to 5 percent of the amount remaining. So if you have $300,000 after the bridge to Social Security, you’ll have Social Security plus $12,000 to $15,000 a year. Third, any money you earn working goes to restore the money spent on the bridge between now and age 62.

You have the opportunity and the time to make every dime of income go further than it will go while you are working 9 to 5. You could double the effective purchasing power of your income.

More importantly, as many full-time RVers will tell you, it could change your life and reduce your concern about money.Questions about personal finance and investments may be sent to Scott Burns at The Dallas Morning News, P.O. Box 655237, Dallas, TX 75265; by fax at 214-977-8776; or by e-mail at scott@scottburns.com. Questions of general interest will be answered in future columns.