The recent instability of the stock market has led many people to feel an understandable amount of scepticism and fear. It can be scary to consider keeping your money or placing any new money into the market during such tumultuous times. This holds especially true for people nearing the age of retirement, because those individuals want to be sure that they are prepared to have a relaxing and smooth transition at the end of their careers.
However, it’s important not to lose your head or do anything drastic. As concerning as it may be, fluctuations in the stock market are inevitable, and making changes based on instinctive fear rather than calculated planning can result in losses that will hinder you in the future. Instead, consider a sensible plan to reassess your finances and ensure that you are prepared for retirement without making big moves in the stock market.
First, you should make an assessment of your retirement plan. Doing figuring on your retirement and finding out how much you’re planning for will give you an accurate portrayal of your needs and your current means. Online retirement planning calculators will help you through this process.
You should also do some figuring on your assured income. Find out what you will be earning through Social Security by using tools like Social Security’s Retirement Calculator. The likely scenario is that you’ll still have some funds in your retirement planned which need to be covered, so you will have to turn to your portfolio.
Finally, you’ll want to do some reallocation of your stocks and bonds. Half-and-half is a good way to start, and you can adjust from there as you see fit. If you consider yourself to be in good health, it might be a better idea to increase stocks, for example.
Another way to handle the situation is to consider making some portion of your savings for retirement into an annuity. In this instance, you will not have to rely on the ups and downs of the market, and you’ll be able to support yourself reasonably.
Go through rational, prioritized steps when assessing your finances and you will be able to come up with a plan for retirement that doesn’t depend on the stock market any more than it has to.