4 Tips to Protect Your Savings During Economic Uncertainty

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​The United States economy has enjoyed a prolonged period of economic growth for nearly a decade. Financial markets have reached record levels. Companies have added jobs. Inflation has remained relatively low. Nothing lasts forever, though. The economy and financial markets can be unpredictable. Just because recent history has been positive doesn’t mean the future will be as well.
 
While it’s not possible to predict future economic events, it is possible to plan ahead. There’s always the possibility that a new development could unsettle the financial markets and create challenges. Interest rate increases could cause volatility. The ongoing trade war could become a disruptive force in the economy. Growth could simply slow as the markets and economy correct themselves.
 
Below are a few tips and ideas to consider as you approach retirement and evaluate your financial strategy. Your plan should be based on your unique goals, objectives and concerns. If you’re worried about the state of the economy, and if you’re prepared for change, you may want to consult with a professional.
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Don’t make an impulsive decision.
 
As you approach or enter retirement, it’s natural to become more risk-averse. After all, you’ve worked hard to earn your savings. The last thing you want is for your assets to decline in value just when you need them.
 
However, it’s also important not to make a rash decision. Nothing is permanent, and that includes times of economic uncertainty. If you abandon your long-term strategy and rush to safety, you could cost yourself future growth opportunities.

Instead, assess your long-term strategy and decide whether it still aligns with your needs. It’s possible that you may need to shift to a more conservative allocation. Or there may be tools you can use, like annuities, that protect you from downside risk.

Re-balance on a regular basis.
 
Do you regularly re-balance your 401(k), IRA or other retirement accounts? Many custodians and providers offer this as a free automatic feature. Re-balancing is simply the adjustment of your investments back to your intended allocation. You can do it on a regular basis, such as quarterly or every six months.
 
Re-balancing is important for a couple of reasons. First, it keeps you aligned with your long-term strategy. Over time, some assets increase in value while others decline. That can cause your allocation to get out of balance. When you re-balance, you sell off some assets that have increased to purchase assets that have declined and get your allocation back to its targets.
 
The other benefit is that re-balancing forces you to follow the old idiom of “buy low, sell high.” You’re selling those assets with elevated values and buying those with depressed values. That could help you take advantage of an economic and market fluctuation.

Don’t stop making contributions.
 
If you’re seeing economic uncertainty on the news, you may feel like now is the time to pause your retirement savings. However, that’s usually not a wise strategy. You need every dollar you can save for retirement. Even if there’s volatility in the market or the economy, it’s still important to save.
 
Also, regular contributions can be a helpful investment strategy. When you contribute the same amount regularly, you’re doing something called dollar-cost averaging. You purchase more shares when prices are low and fewer shares when values are high. That could reduce your average cost per share and increase your potential growth.

Work with a professional.
 
Finally, perhaps the best strategy you can take during a period of economic uncertainty is to meet with a financial professional. They can talk through concerns and ideas with you and help you evaluate your options. They may present ideas that you hadn’t considered. Before you take drastic action, talk with a professional and review all your potential courses of action.

Ready to review your investment strategy? Let’s talk about it. Contact us at Rex Financial Group today. We can help you analyze your approach and make sure it’s aligned with your goals. Let’s connect soon and start the conversation.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18184 - 2018/10/22

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