Coronavirus has disrupted many lives in a lot of ways. Many older Americans are wondering if it’s safe to retire. Financial Professional Kendall Stahl from 210 Financial shares how to gauge whether you should retire now or wait it out.
Take Inventory of Your Savings
- When deciding to retire, one of the biggest factors to consider is if you have enough money saved to sustain your lifestyle in retirement.
- To figure this out, take inventory of your retirement accounts, including 401(k)s and IRAs.
- If your savings took a hit and you can’t afford to live off what you have, you might need to delay retirement.
- I have a retirement calculator on my website 210financial.com that can help you get started.
Work with an Expert
- I recommend working with an expert. A financial professional can help you put a plan in place so you can prepare for and withstand difficult economic times.
- A comprehensive plan will help you feel more secure as it outlines your retirement goals and the path you need to take to achieve them.
- Our retirement blueprint provides clients an outline while allowing for flexibility, helping to alleviate one of their biggest fears – outliving their money. We take the worry out so clients can feel confident in their financial future.
- We have more information about our planning process on our website.
Rebalance Your Portfolio
- Your investments should be diversified and have appropriate risk for your age and how close you are to retirement.
- Spreading out your money into different types of investments can help you steer clear of the extreme highs and lows of the market and help you stay the course.
- A financial professional can work with you to rebalance your portfolio and hold you accountable to your plan when your emotions take over.
Seek Other Investment Strategies
- You might want to consider guaranteed income sources, which are not impacted by market volatility, like annuities or life insurance.
- If you’re fortunate enough to have a pension, that can also provide a steady source of income in retirement and should be worked into your comprehensive retirement plan.
- Consider accumulating a cash reserve in a high-yield savings account to cover a couple years’ worth of expenses.
Consider a Roth Conversion
- Now might be a great time to convert your traditional IRA or 401(k) to a Roth IRA; your account balances might be down, and we’re in a historically low tax environment.
- You will pay taxes on the money you convert, but you would be investing in the stock market at an opportune time.
- Money in a Roth IRA grows tax-free and can be withdrawn tax-free in retirement.
- Another benefit of a Roth account: There are no required minimum distributions in retirement.
Evaluate Your Plan
- One of the most important things a pre-retiree can do is learn what it takes to build a comprehensive financial plan.
- A retirement plan isn’t a budget; it’s a written income plan that includes Social Security strategies, healthcare, income planning and tax planning.
- A financial professional can help guide you through the process if you’re not sure where to start.
- The roller coaster on Wall Street and record unemployment numbers have many of us worried about the fate of our retirement savings.
- But this isn’t the time to let our emotions get the best of us. Keeping your money invested in the markets is often better in the long-term than panicking and selling.
- Keep putting money in your employer-sponsored 401(k) or another type of retirement account like an IRA.
- I recommend my clients save 10-15% of their salary in their retirement accounts.