(2 Minute Read)
The stock market is notoriously profitable, but also notoriously changeable. Many of those already in retirement or hoping to retire in the next few years have investments like 401(k) plans and IRAs which they hope will support them into old age. When the market is booming, that’s an easy prospect, but when things are down, it can be scary to think about the future. Here are some steps seniors can take to survive the ebb periods of the market.
Don’t Panic
When things look bad, people make notoriously bad financial decisions. If the DOW drops a few hundred points, investors might feel the urge to sell and get what money they can before it all disappears. Buying high but selling low is something that can do some serious damage to your retirement dreams. Quiet your emotions and remember that everything is a cycle.
Get a Financial Advisor
If you’re not able to counsel yourself in the tough times, having a trusted advisor on your side is invaluable. A good financial advisor will be able to explain the current market conditions and give forecasts that might ease your mind. They’ll also know when the best option is to sell, but they won’t pull the trigger out of emotion.
Reduce Withdrawals
If you’re taking withdrawals from a stock portfolio, selling stocks generates that money for you to use. At a time when the market isn’t doing well, selling stock anyway to get cash isn’t a great option. If you’re really worried about your money lasting the decades ahead, taking less funds for your own use during low periods of growth will make sure there’s more around to grow when the market is strong again.
Other Income and Savings
Some of your investments, like your home, are not tied directly to the stock market. Consider tapping into these assets when your stock portfolio needs time to recover. Secondary income from Social Security or a pension should also be exploited. Getting a part time job might also be necessary to cover costs when you can’t rely on your portfolio to provide income. You can also choose to explore an option like a life settlement. If you have a life insurance policy, you can recoup the cash you’ve paid into it to support yourself until the storm passes. Visit our calculator to see if you qualify.
