Retiring in a Rocky Market by the Hills Bank Wealth Management Team
your best not to let emotions dictate when or if you sell assets, preventing the potential of turning short-term volatility into lasting damage. Time Withdrawals Strategically There are ways to time your withdrawals strategically to help your most volatile investments rebound with the market; seek advice from a professional before making any drastic decisions to your investment or withdrawal strategies. In general, however, to help protect the wealth you’ve built, one approach is to delay withdrawing from the most affected parts of your portfolio; these are the assets that lose value quickly during downturns like individual stocks, stock mutual funds, and ETFs. If you need to withdraw, do so from the least-affected parts of your portfolio first. Things like cash or money market funds, and fixed- income investments, like bonds or bond funds, tend to be more stable than stocks and don’t fluctuate as dramatically during downturns. Using these funds for your living expenses gives your stock-based investments time to recover, rather than forcing you to sell them at a loss.
If you’re getting ready to retire – or already enjoying retirement – seeing your account balances drop stirs up anxiety, uncertainty, even fear. Fortunately, there are things you can do to regain a sense of control and stay on track. While market downturns are unsettling, there are strategies you can use to lessen the impact on your retirement. The key is knowing how to respond with purpose, not panic. It’s not about drastic moves; it’s about flexibility, staying informed, and protecting the long-term health of your retirement. Risks of Selling in a Down Market Before taking any action, it is important to understand the risk of selling investments during a downturn. Sometimes investors react to a market downturn by selling stocks, trying to protect what they’ve saved. But by selling early, you lock in a low value that might have been temporary. If you’ve been investing for years, your portfolio could include a lot of long- term growth. When you sell during a dip, you take a hit and miss out on a chance for those investments to recover when the market rebounds. Do
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