It’s common to have concerns about the state of your retirement investments during times of market fluctuation. If you’re anxious about the potential impact of market volatility on your financial future, know that you’re not alone. However, there are strategies you can implement to help manage these concerns and stay calm during periods of uncertainty. The Benefits of Systematic Investing One of the basic principles of wise investing is buying more shares when prices are low and fewer when prices are high. By investing a set amount of money regularly, you can take advantage of fluctuations in the market. This approach is known as systematic investing. Systematic investing involves making continuous investments regularly, regardless of the current state of the market. This method can be a helpful strategy for investors who want to take a long-term approach to build wealth. While this strategy does not guarantee a profit or prevent a loss, it is crucial to be financially able to continue investing during periods of high and low prices. In addition, by committing to a systematic investment plan, you may be better able to take advantage of market opportunities and potentially grow your portfolio over time. Strategies for Managing Retirement Investment Risk As you near retirement, it’s essential to consider the potential risks to your nest egg and how to mitigate them. One significant risk is the possibility of experiencing poor investment returns in the early years of retirement, which can impact the long-term sustainability of your savings. Fortunately, there are strategies you can consider to help manage this risk. One strategy for managing investment risk in retirement is implementing a tiered approach. The portfolio is divided into tiers based on short-, medium-, and long-term needs for income and growth. The short-term tier(s) can hold assets designed to preserve value. The medium-term can hold investments that aim to provide income for three to ten years, and the longer-term tier(s) can include higher-risk, higher-growth-potential assets that are not needed for at least ten years. This longer-term tier is typically intended to support the overall retirement strategy by fueling the shorter-term. Another strategy to consider is purchasing an immediate annuity. It is an insurance-based contract in which you pay the issuer a single lump sum in exchange for the issuer’s guarantee of regular income payments for a fixed period or the rest of your life. An immediate annuity can offer a predictable retirement income paired with Social Security and other steady income sources to cover your fixed expenses. The Temporary Nature of Bear Markets Bear markets might be unsettling, but it’s crucial to remember that they eventually end. Seven bear markets occurred between 1970 and 2021, the oldest lasting less than three years. A hypothetical $10,000 investment in the S&P 500 in 1970 would have increased to almost $2.3 million by 2021, even though the current bear market started in January 2022. This investment would have been profitable even after the lousy market of 2022’s first nine months when the value was still close to $1.8 million. It shows that long-term growth is possible, even under unpredictable market conditions. It’s critical to keep this viewpoint in mind and refrain from making snap judgments based on transient market swings. The Role of a Financial Professional in Managing Retirement Investments If you have concerns about your retirement investing strategy during volatile markets, you may find it helpful to work with a financial professional. This can be a valuable resource to provide objective guidance and help you evaluate potential portfolio shifts. However, it’s important to note that all investments carry risks, and there is no guarantee that a financial professional will improve your investment results. Regarding annuity contracts, there are several things to consider, such as fees, charges, restrictions, exclusions, holding periods, termination clauses, and other conditions. The fact that most annuities contain surrender fees imposed if the contract owner wishes to terminate the annuity should also be noted. In addition, earnings from annuities are usually taxed as regular income, and withdrawals made too soon (before age 59½) may incur a 10% penalty. Furthermore, any assurances included in an annuity contract are subject to the issuing insurance company’s financial stability and capacity to pay claims.
Contact Information:
Email: [email protected]
Phone: 8139269909
Bio:
For over 30-years Joe Carreno of The Retirement Advantage has been a Federal Employee Retirement System specialist (FERS) as well as a Florida Retirement System specialist (FRS) independent advocate. An affiliate of PSRE (Public Sector Retirement Educators), a Federal Contractor & Registered Vendor to the Federal Government, also an affiliate of TSP Withdrawal Consultants. We will help you understand your FERS & FRS Benefits, TSP & Florida D.R.O.P. withdrawal options in detail while recognizing & maximizing all concurrent alternatives available.Our primary goal is to guide you into retirement with no regrets; safe, predictable, stable, for life. We look forward to visiting with you.
Disclosure:
Not affiliated with the U.S. Federal Government, the State of Florida, or any government agency. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Although we make great efforts to ensure the accuracy of the information contained herein we cannot guarantee all information is correct. Any comments regarding guarantees, safe and secure investments & guaranteed income streams or similar refer only to fixed insurance and annuity products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC insured.
