When the winter seasons come around, you’ll likely have to adjust your routines and prepare. If you’re in colder states you may be looking to purchase a new winter coat or snow boots, skiing equipment for your winter holidays, or you may be restocking your sand or salt for what are soon-to-be icy sidewalks and driveways. Even if you live in warmer states, maybe you’ve closed your windows and patios or put your fans and AC units away.
The same way you prepare for the winter, you might have to prepare your retirement finances for a potential recessionary period if you haven’t already. The tricky part is preparing in a way that makes sense for you. There is no simple fix for getting ready for recessionary periods – what is right for you may vary based on your unique financial situation, goals, and retirement timelines.
We might see sustained inflation, more market volatility, and an overall tighter economy. For one person that might mean reassessing their risk tolerance and portfolio holdings to make sure that they hold assets that will at least sustain their value or provide a safer return such as an interest rate or a dividend yield. Others may take a closer look at their income streams and see how they can either adjust their lifestyles to fit the increased inflation. And others may have thought to sell their homes and downsize to a new one, only to find it harder than before to sell at their target price or to find a mortgage rate that fits their budget.
When markets were smooth sailing, it may have felt easy to put your retirement finances on autopilot and watch them grow. But retirement is a long-term game, and along the way, there are bound to be setbacks and downturns like the one we’re seeing now. So, preparing for the likelihood of a setback or recession is important when it comes to retirement strategy.
There is a plethora of factors to be aware of when it comes to protecting what you’ve worked so hard to save for during hostile market environments. That’s why it’s more important than ever to consult a financial professional that has your best interests in mind. There are many advisors out there that work to sell you cookie-cutter financial products that may not be right for you. Finding an advisor that can offer you a wide range of products and services based on your unique financial situation and goals is a great way to make sure your retirement is protected and can provide you with what you need.
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