5 Ways To Safeguard Retirement Savings From Market Volatility

Author: AB Staff

5 Ways To Safeguard Retirement Savings From Market Volatility


It is safe to say that we all want a secure retirement. However, an estimated 40% of Americans are concerned about the rate of inflation and how it will affect their retirement savings.

The recent market volatility has many of us wondering how to secure our retirement plans. We can take various approaches, including increasing personal investment in the stock market, protecting against inflation as a valuable asset, or keeping enough cash on hand to live off of without having to work.

However, most retirement planning must be done throughout your job. The concepts of a well-thought-out retirement plan are not new. Many people fail to create a retirement plan because they want a different type than their work requires.

Examining downside protection: Firstly, we must look at what can go wrong with our retirement plans. Many things that scare people include a stock market crash, an economic recession, and natural disasters.

So, company-funded insurance plans and emergency funds are two strategies to safeguard yourself. These two measures will protect you against both of these very common risks.

Consider long-term options: Buy assets that perform well in good and bad years. Some assets are more desirable. For example, gold is an inflation and wealth erosion hedge. These open-market investments have exchange rate risks.

Moreover, long-term assets include real estate. Real estate has depreciated less than gold and may be undervalued. If you want to avoid stocks or mutual funds, this investment can help. This could be a safe rental investment.

Hold out for Social Security: Consider whether your Social Security benefits can supplement your retirement plan. You may likely keep receiving these benefits as long as you’re employed, but retirement can change this. Those with 401(k)s who want to supplement their income may want to retire early to maximise Social Security benefits.

Think About Adjustable Withdrawal Rates:  Your retirement plan should also consider withdrawal rates. Many retirees believe they may withdraw assets at a constant rate and never run out.

Although this is not always the case, withdrawal fees can quickly deplete your savings. Alternatively, start with a low withdrawal rate, say 4% or 5% yearly, then gradually increase it to account for inflation.

Keep your retirement portfolio growing: One of the last things to consider is how fast you want your retirement portfolio to grow. Consider a company-sponsored 401(k) or IRA if you want a speedy return.

These long-term strategies allow you to invest in assets that might increase and give retirement stability. However, an ETF would be better for your plan if you value steady returns over time.

To keep up with inflation, you should save as much as possible for your retirement plan. Setting goals is the most important part of the process. Without goals and objectives, you may not know how retirement will affect you. However, you can join our forum to share and get ideas on this subject matter. Register as soon as possible to get started.