For those who still have a number of years until retirement, there’s plenty of time to recover from the current market volatility. Overtime, the stock market rebounds. It just requires patience and the ability to sit tight and weather the storm.
But for those who are 5 years from retirement, or just in retirement, it’s a different ball game. But how it is best played? First off, we suggest you remain prudent vs. panicked. And then follow 4 important steps to make sure you protect your retirement.
- Re-Allocate & Relax. The closer you are to retirement, the more important it is to re-allocate a traditional 60/40 stock/bond portfolio to a Hybrid Income Portfolio that reduces the risk of your portfolio, but still offers growth. By adding structured investments to replace the bonds (since bonds are at historic lows), you can have your cake and eat it too (protection from market decline and growth when market bounces back). The proper balance between stocks and structured investments depends on your situation, income sources, goals and risk tolerance. Ideally, pre-retirees make adjustments to their traditional, accumulation phase portfolio BEFORE a crisis happens, because you never know when a recession will strike, and you want your portfolio to be optimized and protected BEFORE volatility takes hold. You must also consider how much of your portfolio to have in cash (for emergencies).
- Mitigate Risk. A prudent part of pro-active retirement planning includes mitigating all the risks of retirement, including health/long term care risks and protecting your loved ones once you pass. Now’s a great time to consider healthcare or long-term care costs, as well as making sure you have an updated will and trust in place (within the last 5 years).
- Be open to considering a delay in retirement…working longer into retirement (whether there’s a pandemic or not) is one way to make sure your retirement savings lasts longer. It will be worthwhile to consider the impact of working a bit longer before calling it quits on working, especially if your savings have taken too big a hit during this temporary downturn, or if you were very close to retiring. Now’s the time to re-evaluate your needs for retirement and have a retirement income projection analysis done.
- Request a Portfolio Assessment…from a retirement advisor in our network. A retirement advisor in our network can provide you a valuable analysis to assess and stress test your current portfolio against all market environments. You’ll also be shown the impact of applying research-backed and proven retirement strategies. This complimentary stress test could be one of the best decisions you make this year. No strings attached…just a look at what you’ve got at risk and how to protect your nest egg, while positioning it to protect against further decline and take advantage of growth when the market bounces back. No one really knows where the market is headed, but there is a way to be pro-active and smart, and better protect what you’ve got.
While these are certainly challenging times, they are not entirely unexpected. Market downturns have been and always will be something we must be prepared for. We cannot control the economy or the stock market, but we can control our own portfolio and retirement plan.
The good news…Retirement is STILL possible. But, you must take action to protect what you have and be ready when the market bounces back. If you’d like to have a complimentary chat with a retirement advisor in our network about your portfolio or any aspect of your retirement plan, simply fill out the form at right and we’ll set you up. Here’s to health and wealth.
Please reach out to: email@example.com with any questions.