The News Herald (Willoughby, OH)
Financial Focus
RETIREMENT PLANNING
Q: How much should older workers and retirees invest in the stock market?
A: Those at any age who are worried about market volatility and losses should reduce the risk in their portfolio. They need to find out the exact percentage of risk that is in their mix of investments. Many think they know the risk level but are surprised when they get a second opinion. Any vehicle that can potentially lose money (stocks, mutual funds, variable annuities, bonds, etc.) should be included in the risk category.
If you are in your 50’s or older, the challenge is that your are going to rely more on your financial resources once your income stops. It is important to protect yourself against stock market declines that are inevitable in the years ahead during retirement.
A major mistake investors make according to Forbes Magazine is that they sell after the market crashed. It makes more sense to sell and lock in the gains when the market is up. Yes, there will be taxes. If investors procrastinate, aren’t the losses far worse than the taxes owed? Think of it like walking out of a casino with your winnings before you lose them.
You will want to protect yourself against stock market crashes by getting an independent assessment on your investments and the amount of risk. If you reconstruct your mix of investments now, you’ll be able to sleep well at night. “It wasn’t raining when Noah built the Ark.”
Develop sources of retirement income that won’t drop when the stock market crashes and don’t take income from the wrong accounts. You should have enough money liquid for emergencies, planned purchases, vacations, etc. Your reliable sources of income should be from pension, Social Security and the right index annuity (some are far better than others and will pay out a higher monthly income than all of the others.) Considering an annuity? Ask for our Annuity Comparison Report.
The remaining money can be invested in the stock market in your comfort level.
If you have this plan in place, (Lifeguard Financial calls it your “Financial GPS”) you’ll have the confidence to ride out the crash and enjoy your life in retirement. Need help? Call Lifeguard Financial today.