Most people have retirement investments that are sensitive to stock market swings. 401(k)s, some annuities, and target-date funds are all responsive to changes in the value of equities, bonds and Treasury bills.
Some people like to have that level of risk in their retirement portfolio because the upside can be significant. To protect against devastating losses to retirement assets, however, you should have a good blend of conservative investments that don’t lose principal and do keep building steadily—even if slowly—to balance out the risk that you might have a deep or prolonged down period that suppresses your dividend income.
Products such as IRAs, guaranteed-principal annuities, and Social Security don’t go up or down with the stock market and are good backstops in case of losses to your other accounts. You should also establish an excellent budget that prepares you for home, health and auto expenditures well into your future. Our financial specialists can help you with all of this so your retirement can be more secure.