Volatility is a given in any financial market. Investment markets are constantly fluctuating up and down based on economic news, world events and other factors. Those who have a long time horizon may not be rattled by short-term volatility. Retirees, though, may not have the luxury of time.

If you’re like most retirees, you’ll rely on your savings and investments for income. A market downturn could threaten your ability to generate income and have a substantial impact on your lifestyle.

You can’t predict how markets may perform in the future. However, you can take steps to minimize your risk exposure and protect your assets. Below are a few tips you may want to consider as you approach retirement:


Review your allocation.

Diversification is an important element in any investment strategy. Simply put, diversification is the idea that you should allocate your funds among many different asset classes. Your allocation should be based on your specific needs, goals and risk tolerance. By utilizing many different types of assets, you avoid risk that’s tied to one specific type of investment.

You may have taken a more aggressive stance as you’ve accumulated money. There is often a relationship between risk and return. If you can tolerate some short-term fluctuation, you may achieve greater long-term return.

As you approach retirement, however, time may not be on your side. This could be a good time to reevaluate your investment strategy and shift toward assets that have less historical volatility. That could reduce the risk that you suffer a sharp downward movement in value as you approach retirement or in the early years of retirement.


Maintain a liquid emergency reserve.

An emergency reserve is always important, but it takes on heightened importance in retirement. As you advance in age, you may become more susceptible to serious injury or illness. This could lead to sizable expenses for medical treatment or long-term care.

Without an emergency fund, you may be forced to pay for these costs with distributions from your investments. Those withdrawals could amplify the impact of a market downturn, making it more challenging for you to recover.

Instead, keep an emergency reserve available. Use a liquid, low-risk account to hold these funds. If you face an emergency cost, use your fund to cover the expenses. That minimizes your need to take distributions from your investments, and it protects your assets from greater damage.


Don’t make rash, emotional decisions.

It’s natural for a market decline to cause stress and anxiety. You’ve worked hard your entire career to accumulate these assets, and you depend on them to support your lifestyle. A decline in value could have a real impact on your retirement.

However, it’s important to remember that your retirement could last multiple decades. You’ll need growth to generate income and keep up with inflation. If you make an emotional decision to move all your assets into low-risk vehicles, you may also have little opportunity for growth.

Instead, stay focused on your long-term goals. A financial professional can help you take protection steps without sacrificing future long-term growth.

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


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.

17512 – 2018/3/26