The Do's and Don'ts of Retiring in Uncertain Times
It started with the Corona Virus Pandemic. Then came political tension, inflation, and now geopolitical troubles. After years of strong growth in the stock market and some early struggles this year, concerns about retirement continue to grow. Has it left you wondering,
Am I Going to Be Okay?
If you are within five years before or after your retirement, the decisions you make have will impact your long term success. Think of this as the "fragile decade." Economic uncertainty and negative investment returns in this time period can cause major problems for retirees. Having a sound plan can help you eliminate stress and reduce risk.
Are You on the Right Track for Retirement?
With uncertainty dominating the headlines, you may find yourself asking questions like:
- How will higher interest rates and inflation impact my cash flow?
- What will I do if another recession strikes?
- How can I prepare for uncertainty?
- What should I be doing?
If so, you are in the right place.
The Do's and Don'ts of A Sound Retirement Plan...
Uncertainty never changes. The choices you make have a major impact on your long term success. Here are some critical "Do's" and "Don'ts" to help you deal with uncertain times.
#1: Focus on What You Control
Nobody could have predicted the pandemic or the recession it created. Not many anticipated significant geo-political tension. Our own political situation causes plenty of stress. The economy and investment markets react to all of it. You control how you act and your choices.
Ask these critical questions...
- Do my plans factor things like recessions, bear markets, and extreme levels of volatility?
- Can I adapt when faced with bad times and difficulties?
- What happens if I'm forced to retire early or late? What if I have to retire gradually?
- Is my spouse on the same page with my ideas of retirement?
- Have I discussed my plans with a financial advisor?
#2: Protect Your Retirement Income
A financially successful retirement requires a plan to manage your cash flow. Some income sources are fixed and dependable. When income comes from your savings, you need to have a plan.
Ask These Critical Questons...
- Do I have enough set aside to avoid "selling low" if my savings have decreased in value?
- Do I have a plan for my Social Security Income?
- Does my income plan allow me to be flexible in volatile markets?
- Have I stress tested my plans to see what might happen if we face a major economic event like the Dot Com Crash or the Great Recession?
- Have I discussed my income strategy with a financial advisor?
#3: Review Your Investments
Investing in retirement requires a different mindset. Understanding the tradeoff between risk and reward takes on a completely new meaning. Getting it wrong can mean delaying retirement or cutting back on your dreams.
Ask these critical questions...
- Do I understand the risk-reward elements of my portfolio?
- Will my retirement savings create the income I need?
- Do I have a plan to adjust my portfolio based on current conditions in the investment markets and economy?
- Do I have a plan to address extreme events?
- Have I discussed my strategy with a financial advisor?
Watch: Are We in the Retirement Danger Zone?
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#1: Don't Make Decisions Based on Fear
Uncertainty causes a lot of stress. Making one of the biggest transitions in life amplify it. Add to that, the potential for a bear market or a recession and you have a recipe for a lot of indigestion. Giving into fears can cause you to make big mistakes that can ripple through your retirement.
Are you at risk of making fear based decisions?
Critical Questions You Should Ask:
- Am I checking my account balances often?
- Do I have a good, unemotional plan in place?
- Am I chasing trends or hot investments?
- Am I not taking enough risk so I miss out on needed growth?
- Have I discussed this with a financial advisor?
#2: Don't Put Off Critical Decisions
Sometimes waiting until the storm passes feels like the right thing to do. But in real life, we always face uncertainty and potential problems. Inaction, at times, can cause bigger long term problems.
Is your future at risk?
Critical Questions you should ask:
- Am I confident my strategies can help me deal with the current uncertainty and carry me through a multi decade retirement?
- Have I taken the steps to protect myself, my spouse, and my lifestyle from volatility and adversity?
- Have I discussed my plans with a financial advisor who has guided others through difficult times?
We are here to help...
Our team has more than 130 years of combined experience helping people like you navigate through some of the worst financial conditions. Talking to a member of our team can help make sure you are on the right path. Fill out the form below, and one of our advisors will arrange a time to discuss your plans.