TIPS FOR BUYING A CAR DURING RETIREMENT
aybe your decades-old car finally bit the dust. Maybe your ride got totaled by a teenager on a smartphone. Or
Third, could you just pay cash? Most of us don’t have buckets of the stuff lying around, but you can always tap into an IRA or other account for the money to buy a car. Try to do half in December and half in January to split the tax penalty between two years. You could also sell off two cars and use the money they generate to buy one, which will cut down on other car-related expenses as well. The last question is, what are the hidden costs? Maintenance and repairs are just par for the course, but they don’t tell you that as you age, your insurance premiums could go up, especially after that texting teenager T-boned you. Your retirement planner should have a big-picture idea of what you should plan and watch out for when you buy a car.
maybe you just want a new set of wheels. There are a lot of reasons why you may find yourself looking to buy a car, and there are a lot of questions to answer before you do. The first question is, did you plan for this expense? The average American buys a new car every seven to 10 years, so if you plan on 20 years of retirement, you need to factor in at least two car purchases during that time — and possibly more. The second question is the biggest one: Where’s the money going to come from? Most people, including most retired people, will finance their new car and trade in the old one. This is a good option for people with steady retirement income, such as those drawing a pension. But it might be harder to get a loan if your income is less consistent, say, if you liquidate investment assets every month to pay the bills. If you’ve been planning for retirement for any substantial period of time, you know that the market fluctuates. No matter how smartly you invest, everyone is susceptible to the overall trends in the market. Capitalism, by its very nature, is not a static economic system. We’d all like for the market to grow year over year, but that’s just not how things work out. Because of this, you need to alter your investment mix in accordance with the market in order to meet your goals. As we’ve said in this newsletter before, if you’re not updating your retirement planning, you’re not planning at all. Every aspect of your plan is subject to change based on your investment mix, the current stage of your life, and the overall shape of the market. Maintaining proper ratios of financial products within your portfolio is crucial for limiting risk. As you near retirement, you probably want to move into more conservative investments because you’ll have less time to recover from any losses. All of this advice, though, rings hollow
ALTER YOUR GOALS AS THE MARKET CHANGES Financial Planning Isn’t a Static Target
if it isn’t refracted through the state of the market in a given year.
capitalism is cyclical. For every boom, there is a bust. Looking at the investment world through rose-colored glasses will only lead to disappointment when markets slow down. Luckily, no matter how the market is doing, there is a strategy to meet your needs. Adaptability and regular communication with your financial planner are the best ways to make sure your plan will achieve your retirement goals.
If the market is booming, you may want to stretch your legs a little and move into more aggressive options. These bull periods, however, don’t last forever. You should be in constant contact with your financial planner to ensure that you are never overexposed. When times are good, it’s easy to think growth will last forever. But
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