3 Tips For Planning Your Retirement During Uncertain Times

Retirement planning can be fraught with worry in the best of times, but when the market turns volatile and uncertainty reigns, people in or near retirement may give way to anxiety or unease to an even greater degree than normal.

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And as a result, those dreams of carefree golden years may transform into sleepless nights.

“Plenty of people remember what happened with their 401(k)s when the recession hit a decade ago, and that naturally can make you nervous,” says Jeffrey Eglow, the Chief Investment Officer for Guardian Wealth Advisory.

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“But that makes it all the more important to make a plan and not leave everything to chance.”

The good news, Eglow says, is anyone can start taking steps now that can improve the odds retirement will be fulfilling and joyful.

Certainly, each person’s circumstances will be different, and just because a specific financial strategy worked for your neighbor doesn’t mean it will work for you. But Eglow offers a few general tips for navigating the financial road ahead to help give you a more secure retirement:

  • Don’t underestimate your retirement’s length. People are living longer than ever, which means retirements can last longer, too. Many people may assume they need to plan for 20 years, when in fact their retirement could last 30 years or longer, Eglow says. As you figure out how much money you will need, make sure to plan for what could be a long retirement. “Having a target amount in mind is critical,” Eglow says. “Without a target amount, you have no way of measuring whether you are on track to meet your goal.”
  • Know where your retirement money will come from. Social Security likely will help fund a portion of your retirement, but it won’t be enough to replace your weekly paycheck, Eglow says. Some people have pensions, but those are fast disappearing for most workers. “That means personal savings, such as in an IRA, a 401(k) or other investments, will play a major role in whether you have a satisfying retirement or whether you struggle to make ends meet,” Eglow says. “Unfortunately, studies have shown that many Americans aren’t doing a great job with their savings.” It’s important to sit down with your financial professional, determine where you stand, and make a plan so you don’t run out of money, he says.
  • Determine your risk tolerance. At some point, as you create a financial plan and determine the best investment strategy for reaching your goals, you will need to do a little self assessment, Eglow says. “Some people are fine with taking risks with their money,” he says. “Others become uneasy at the thought that they could suffer a big loss if the market takes a sudden turn for the worse.” Each individual investor needs to decide whether the potential rewards of an aggressive investment strategy outweigh the stress they might feel about the uncertainties of how the market will perform. In addition, you likely will want to re-assess your risk as you draw closer to retirement because you’ll have less time to recover if the market does take a plunge.

“If you’ve been stashing money away for retirement, that’s great,” Eglow says. “But you should do more than save. If you want to reach your financial goals efficiently, you need to have a good, solid plan that will get you there.”




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver