Risk 3: Are you taking too much risk with your retirement savings?
Tip #3. Choose opportunities that protect your savings. One way to protect your retirement from a market downturn is holding a diversified portfolio that includes traditional investments, such as stocks, bonds, and funds, as well as lower-risk opportunities that protect principal.
We live in interesting times (and it’s clear why some consider that a curse). The pandemic, rising inflation, changing interest rates, and geopolitical upheaval have created tremendous uncertainty and market volatility. Stock markets have been highly volatile, 4 commodity prices have soared, 5 and bond markets are vulnerable to rising interest rates. 6 Even when markets are less volatile, most people have relatively low tolerance for risk. More than one in four people are uncomfortable putting any of their retirement savings at risk. 2 A market downturn in either stocks or bonds (or both) can significantly affect the value of retirement savings, which is the last thing someone on the cusp of retirement wants to experience. If a loss is large enough, it could mean delaying retirement.
4 Shiller, Robert. “Shiller PE Ratio for S&P 500.” Multpl. April 1, 2022. 5 “World Bank Commodities Price Data (The Pink Sheet)”. The World Bank. March 2022. 6 “CME FedWatch Tool”. CME Group. April 2022.
WealthLock SM Accumulator
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