It’s not surprising that you might feel a bit of anxiety as you approach retirement. People have always experienced these emotions, and it’s a completely normal way to feel before a major life change. However, we can understand that during these uncertain times, some of you might be feeling more anxiety than usual. That’s okay too; we can help guide you through retirement decisions regardless of everything else that is going on!
For many of you, the potential for stock market volatility might be your primary concern as your target retirement date approaches. You don’t want to be forced to sell assets during a downturn, and we don’t blame you.
We actually expect the stock market to fluctuate over time. That’s just the way it works. But the risks for a thirty-something feel very different than the risks for a sixty-something. In your thirties or even forties, we know that some dips in the stock market may be followed by recovery. Over the long haul (as in, decades) we are looking for gradual gains. Dips just may not be as alarming in some cases, because we’re looking at the big picture.
But in the short term, dips in the market can be scary. You would rather not retire during a market downturn, at which point you will begin withdrawing funds from your retirement account. Pulling out money now means that you stand to gain less when the market rebounds.
Luckily, we do have ways of structuring your portfolio to account for this risk. Diversifying your assets means that you can pull from another source during market downturns, so that you don’t lose the opportunity for gains upon rebound. Typically, many retirees do this by holding a mix of stocks, bonds, and even cash.
The right mix for you will depend upon your risk tolerance, desire for long term growth, and your individual personality. That’s why we feel it is so important to sit down with a retirement professional, who can help you assess your priorities and risk factors. Then together we can come up with solutions that address your concerns, and help you work toward retiring when you had planned.