With the coronavirus outbreak, many Americans are watching the financial markets fluctuate widely and are worried by the drastic dip in their retirement savings. While the younger generation has time to recoup losses, those planning to retire in the next couple of years don’t have that luxury. With no firm grasp of how long the outbreak will last and how bad it will actually get, it’s never too early to take a second look at your retirement savings and take any steps possible to protect it from further losses.
- Avoid Panicking
- Check Your Portfolio Allocations
- Contact Your Financial Advisor
The first thing to remember is that you shouldn’t panic and act without truly thinking everything through. Now, that is easier said than done, but it is important to take a few deep breaths before acting. You should also avoid watching the daily market moves and continually adjusting your account. Remember that history shows that the market will eventually recover and you don’t want to hurt yourself in the long run by acting impulsively.
Your retirement date should have a large impact on how you are invested in the market. Younger investors can invest more aggressively because they have more time to withstand market swings. However, if you are less than 5 years from retirement, you should probably be invested more conservatively. If you are older, you might want to shift to more fixed-income investments that are safer during these uncertain economic times.
Perhaps the most important thing to do during these times is to contact your financial advisor. They will be able to take a thorough look at your finances and determine the best strategy going forward. Just as you would take a broken car to the mechanic, if you have questions about your 401(k) and financial plan in its entirety during these uncertain times, your best course of action is to contact a financial advisor that can give you solid advice moving forward.
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