For nearly nine years, investors have enjoyed one of the longest bull markets in history. However, recent volatility suggests the possibility that the almost decade-long market upswing could soon come to an end.

Volatility is a constant presence in any financial market. For retirees, that volatility can present a difficult challenge. You may rely on your savings and investments for income. If the market suffers a sharp downturn, you may have less income available to pay your bills and support your lifestyle.

There’s no way to predict the future movement in the market. However, you can take steps to protect your assets and limit your risk exposure. If you’re approaching retirement and haven’t yet analyzed your investment strategy, now may be the time to do so. Below are a few tips to help you get started:

Reevaluate your allocation.
Diversification is central to any sound investment strategy. Simply put, diversification means spreading your investments across many different asset classes. This minimizes risk that may be specific to any one asset class and reduces your exposure to volatility.*

Those who have many years until retirement may be able to afford a more aggressive allocation in the pursuit of higher returns. As you approach retirement, however, you may want to consider shifting some of your funds to asset classes that have lower historical volatility. You’ll still need growth potential, but a slight shift toward more conservative assets could reduce your risk.

Maintain a liquid emergency reserve.
An emergency reserve is always important, but it’s even more critical in retirement. You could face costly bills for medical treatment, prescription drugs or even long-term care. It’s helpful to keep a liquid, safe cash reserve that you can use to pay for these types of costs.

Without an emergency reserve, you may be forced to pull these funds from your retirement accounts and investments. Those distributions could exacerbate the impact of a downturn, making it much more difficult for your investment to recover.

Resist the urge to make emotional decisions.
It’s natural to feel anxiety about a market decline. However, it’s important to stay focused on your long-term objectives and avoid rash decisions. It may be tempting to sell your investments and move into cash or other “risk-free” assets. Those assets, though, often come with little growth potential.

Remember: You could live in retirement for decades. You’ll need some level of growth to fund your lifestyle and keep up with inflation. If you move all your investments into low-risk, low-growth assets, you may find that you don’t have sufficient assets in the later years of retirement. A financial professional can help you create a long-term strategy and make wise risk management decisions.

Ready to take a fresh look at your investment strategy? Let’s talk about it. Contact us today at MasterPlan Retirement. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.

* Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment loss. Before investing, you should carefully read the applicable volatility disclosure for each of the underlying funds, which can be found in the current prospectus.

Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
Investment advisory services offered through MasterPlan Retirement Consultants, Inc. a Registered Investment Advisor in the state of Georgia. Insurance products & services offered through Fricks and Associates, Inc. MasterPlan Retirement Consultants, Inc. & Fricks and Associates, Inc are affiliated companies.
MasterPlan Retirement Consultants, Inc. & Fricks and Associates, Inc are not affiliated with or endorsed by the Social Security Administration or any government agency.

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