Date: Apr 28TH, 2023

Navigating an Economic Storm Before Retirement

Many people nearing retirement age are finding that their retirement plans may have to be delayed or put off indefinitely. The performance of their investments in recent years may be a factor, as is the rise in the cost of living due to inflation, high energy costs and escalating health insurance premiums. For older Americans who can no longer work for reasons of health or caring for a loved one, the situation is increasingly dire.

For this reason, it’s important to take steps to preserve your wealth now to prevent a shaky market and inflation from derailing your retirement plans, particularly if your retirement savings will play a significant role in your post-retirement income.

Timing is Everything

While younger workers may have decades to win back lost funds in advance of their retirement, older Americans do not have this luxury. Many investors are still trying to rebuild their retirement funds from the devastating recession of 2008, an event that delayed millions of Americans from retiring, or caused those that had retired already to lower their standards of living.

Getting Professional Advice

While no one can predict what the economy will or won’t do, a professional financial advisor can help you navigate choppy waters by restyling your investment portfolio to meet a number of challenges. A professional will ensure that all your future investment moves are properly analyzed for risk and choose the right custodian for your savings and investments.

A good financial advisor will help you avoid the “invest first and manage risk second approach,” which is where many near-retirees run into trouble. Instead, they will examine your risk exposure before recommending particular investments to reduce your exposure to the broad stock market. Alternatively, your chosen advisor can design a portfolio using investments that can minimize your risk of substantial losses.

Cash Versus Investments

In times of economic uncertainty, an advisor will likely create the right cash-to-investments ratio for you so you can weather economic storms better. Based on your tolerance for risk, the advisor may recommend a cash cushion of six to twenty-four months for the unexpected events that occur in your lifetime. These assets are invested in an interest-bearing account that has 24-hour liquidity.

Professional guidance can also help you anticipate the possibility of negative interest rates, which are unfortunately a reality in many parts of the world today. The advisor can structure your fixed-income investments in a way that helps you avoid the possibility of negative interest rates.

Prime Wealth is passionate about helping you protect your wealth and structure a secure income stream in retirement. Our experienced team of financial planners, investment managers, tax accountants and attorneys work together to help you minimize worries and maximize results.

Learn how Arizona-based Prime Wealth Advisors’ full-service retirement planning, tax, estate, and wealth management can help you ensure you maximize your financial position. Call 623.77.PRIME more information.