Retirement planning is a complex subject, but with uncertainty around our economic stability, many people are concerned that their retirement plans won't hold up. Following the 2008 financial crisis, thousands of people watched their retirement funds evaporate before they even realized what had happened. So how could they have done things differently to withstand the turmoil?
Make Sure Your Savings Are in Place
Savings should always come before investing. If you don't have a solid foundation of savings, you will sabotage your investments as you head toward retirement. Maintaining a substantial savings account will help you through any road bumps caused by uncertain times while allowing your investments to work for you uninterrupted.
Think Outside the Market
Many of the traditional investment vehicles used for retirement planning are directly tied to the financial markets. While we are often encouraged to "diversify" when choosing stocks or financial products, the truth is that all of those products carry the volatility of the market with them. If you are concerned about the stability of the financial markets moving forward, it's time to find alternative investments that operate outside of the financial market. Options include real estate, life settlements, and other products that have a sustained cash value.
Do More Than the Bare Minimum
For many people, reaching the annual cap on an IRA means that your work is done in the retirement planning department. Unfortunately, we know that people are living longer than expected and spending more in retirement than ever before. Even if you max out your IRA each year, it won't be enough to keep you afloat later in life. That's why we believe it's important to focus on building wealth and prosperity years before so that retirement can be full of adventure. Not only does this give you a more comfortable life, but it also contributes to your heritage planning and the legacy that you will leave for your family.
Just because things have grown uncertain in the economy doesn't mean you need to give up on planning for retirement. All you need to do is decide how you should invest in order to minimize your risk in the financial market. With these three steps, you can make it through whatever life throws at your retirement accounts and come out ahead.
If you want to learn more, contact us today.