Guidance for Retiring in a Volatile Market
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Retirement is often referred to as our golden years, and for many on-the-cusp retirees, it’s exciting to anticipate what the future will be. But for those just beginning or near retirement, the market spiral following COVID-19 could create uneasy feelings about the future.
Retirement plans shouldn’t be discarded, nor is this the time for hasty actions, but it’s the time
to be patient and employ strategic long-term planning that involves proactive moves to protect your retirement goals. These five steps can help you through it. 1. Stay Patient: The market thrives on emotions, so it’s important to remain calm and patient. We’ve seen fluctuations in the market like this before. Studies show that those who try to time the market with knee-jerk financial decisions often fare worse than those who stay the course. While this is difficult, it can be detrimental to let short-term circumstances and emotions affect your long-term plan. 2. Meet Your Needs: If you’re retired, then you may need to pull from your accounts each month in order to survive. But during a volatile market, you have to regularly monitor your cash flow and spending. Create a budget for the items you need to pay for each month and ensure your needs are met. 3. Be Conservative: Similarly, assess your spending habits and avoid unnecessary withdrawals. This isn’t the best time to raid retirement accounts for your dream car. 4. Find Balance: This is an excellent time to reevaluate your current portfolio. If you are managing your assets yourself, then a rebalance may be needed. Depending on how the market downturn has impacted you, you might also need to assess your allocation in order to achieve your goals. Please keep in mind it is always important to consider your risk tolerance. 5. Find the Silver Linings: Market downturns are often excellent times to pursue retirement strategies. Conversions of Roth IRAs, tax planning, and investment opportunities are just a few of the financial planning considerations that can pay off over the long term in retirement. At McBeath Financial Group, we believe proper planning is the best strategy to prepare for retirement — regardless of when you choose to do so. If you have questions about the status of your retirement plans or concerns about how the market will affect these plans, then please reach out. We’re here to guide you through this downturn.
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