Helping Plan for Retirement During Market Volatility

At LifeBranch Wealth Partners we spend years, or even decades, working together with our clients through a comprehensive approach to financial planning, taking into consideration wealth accumulation and investment strategies to help ensure our clients are financially prepared for retirement.

Shifting from decades of earning income and saving for retirement, to pulling from one’s own assets in retirement can be an emotional adjustment. A husband-and-wife couple we have worked with many years, providing comprehensive financial planning, and implementing wealth accumulation strategies, have seen their retirement income projections continue to grow at a strong pace. However, this year due to market volatility, the projection is not quite as robust as the prior year causing the couple to step back and evaluate the timing of their retirement. The couple initially planned to retire later this year; now, they are questioning the timing of their strategy and considering working a bit longer until the market volatility calms down. While retiring is already a large life adjustment during periods of economic growth, the emotional impact is compounded when retiring during periods of economic slowdown and market uncertainty. Addressing emotional stress during periods of market uncertainty is an important part of the advice we provide to pre-retirees and retirees. Here are a few considerations that can help manage both the financial and emotional impact of individuals and couples planning to retire and in early retirement during periods of market volatility.

Individuals and couples planning to retire may want to consider delaying retirement an additional 6 - 18 months. By continuing to receive a steady income and save more into retirement accounts until the market recovers soon-to-be retirees can reduce the emotional stress of what can already be a significant life change. Delaying retirement just a short time to allow market volatility to subside can help reduce individuals questioning if they retired too early. Allowing the financial assets to rebound slightly before drawing retirement income can also extend the longevity of the assets and allow a larger buffer for periods of future volatility.

For individuals and couples who are already retired, cutting back on non-essential spending during periods of market downturn can help prevent liquidating a higher percentage of investment assets when account balances are lower. This includes delaying spending on large home purchases that are not time sensitive, delaying car replacements, and spending less on travel during these times.

These actions can be essential for individuals and couples who are already concerned about the longevity of their retirement assets. Working with a financial advisor can provide a better understanding of retirement spending capability and probability of success, allowing individuals to minimize any reduction to their spending during these times and provide additional peace of mind. One thing we know for certain is that periods of volatility will happen and having a game plan and communicating with your financial advisor can make all the difference in navigating retirement and periods of uncertainty. Together we can work to help keep you on-track for your goals and navigate important life transitions. Request a complimentary initial consultation with us to learn more.