It can be really scary to see stock market averages taking a roller coaster ride just as you’re about to retire. So I’m adding this very short post to help bring you comfort.
Not that anyone can guarantee anything or make the numbers do what you and most of us would wish for. And not that you are wrong to keep an eye on the market and how it affects your retirement investments. But there’s a little secret that may help:
You don’t do your retirement all at once!
So what the stock market averages are showing today, is not the for ever after story. And that’s important to keep in mind when thinking about your future.
Of course, there may come a time that you declare the actual date when you are officially retired. And so, if the market is down on that date, you might be tempted to freak out, seeing how much less there is for you to live off of today than just a few weeks ago.
But what goes down can go up. And stock market averages have historically always gone up. Even if it takes time. (See link below for more info and a comforting chart you can turn to as often as needed during the scariest times.)
So you don’t need the money all at once.
That money is there to last you for what we hope will be many many years to come. In up markets and down markets. And if you’ve been good about diversifying your types of investments, you can first turn to investments that are least impacted during any downturns. That includes savings and other cash equivalents.
Or, if you’re lucky enough to have solid interest income, that interest can shield you from having to use too much (or any) of your investment principal. At least for the time being. Even if you’re about to retire and the market tanks.
And then when the markets go up again (they always have), you can breathe a sigh of relief. Also at that point, maybe it’s a good time to reevaluate where your money is invested for an even smoother ride next time.
And now here’s that extra info & comforting chart I promised:
⇒ How To Handle a Stock Market Downturn
More articles to help
What You Need To Know About Stocks
A Simple Guide To Bonds & Bond Terms
The Difference Between Bond Coupon and Bond Yield
Why Does My Mutual Fund Pay a Dividend?
Why Is Annual Percentage Yield Higher Than My Interest Rate?
MBA 101: Guide To Basic Finance Concepts
Portfolio Theory: Why Diversified Investing Is So Important
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