Retirement planning can be fraught with worry in the best of times, but when the market turns volatile and uncertainty reigns, people in or near retirement may give way to anxiety or unease to an even greater degree than normal.
And as a result, those dreams of carefree golden years may transform into sleepless nights.
“Plenty of people remember what happened with their 401(k) s when the recession hit a decade ago, and that naturally can make you nervous,” says Jeffrey Eglow, the Chief Investment Ofﬁcer for Guardian Wealth Advisory (www. guardianwealthadvisory.com).
“But that makes it all the more important to make a plan and not leave everything to chance.”
The good news, Eglow says, is anyone can start taking steps now that can improve the odds retirement will be fulﬁlling and joyful.
Certainly, each person’s circumstances will be different, and just because a specific ﬁnancial strategy worked for your neighbor doesn’t mean it will work for you. But Eglow offers a few general tips for navigating the ﬁnancial road ahead to help give you a more secure retirement:
- Don’t underestimate your retirement’s length. People are living longer than ever, which means retirements can last longer, too. Many people may assume they need to plan for 20 years, when in fact their retirement could last 30 years or longer, Eglow says. As you ﬁgure out how much money you will need, make sure to plan for what could be a long retirement. “Having a target amount in mind is critical,” Eglow says. “Without a target amount, you have no way of measuring whether you are on track to meet your goal.”
- Know where your retirement money will come from. Social Security likely will help fund a portion of your retirement, but it won’t be enough to replace your weekly paycheck, Eglow says. Some people have pensions, but those are fast disappearing for most workers. “That means personal savings, such as in an IRA, a 401(k) or other investments, will play a major role in whether you have a satisfying retirement or whether you struggle to make ends meet,” Eglow says. “Unfortunately, studies have shown that many Americans aren’t doing a great job with their savings.” It’s important to sit down with your ﬁnancial professional, determine where you stand, and make a plan so you don’t run out of money, he says.
- Determine your risk tolerance. At some point, as you create a ﬁnancial plan and determine the best investment strategy for reaching your goals, you will need to do a little self assessment, Eglow says. “Some people are ﬁne with taking risks with their money,” he says.
“Others become uneasy at the thought that they could suffer a big loss if the market takes a sudden turn for the worse.” Each individual investor needs to decide whether the potential rewards of an aggressive investment strategy outweigh the stress they might feel about the uncertainties of how the market will perform. In addition, you likely will want to re-assess your risk as you draw closer to retirement because you’ll have less time to recover if the market does take a plunge.
“If you’ve been stashing money away for retirement, that’s great,” Eglow says. “But you should do more than save. If you want to reach your ﬁnancial goals efﬁciently, you need to have a good, solid plan that will get you there.”
Jeffrey Eglow is the Chief Investment Ofﬁcer for Guardian Wealth Advisory (www.guardianwealthadvisory.com), and has more than 30 years of investment management experience. Eglow started his career on Wall Street as a professional money manager with such ﬁrms as Drexel Burnham Lambert, M.D. Sass, and Henry Kaufman & Company where he oversaw a team managing about $3 billion in assets. He graduated with an M.B.A. degree in Finance from Seton Hall University Graduate School of Business, and a B.A. degree in Economics from Washington & Jefferson College.