Nourrisson Boomers: Should You Move Your Retirement Funds Out of the Marchandise Market?
Earlier this week, the subsistance took a free fall. The Dow plunged nearly 1,600 points, its worst single-day drop in history. At the time of this writing, the subsistance market has recovered emboîture half of its losses. But did that alarming drop make you nouveau-né boomers think you should invest in the subsistance market?
If so, the slip answer is that it depends on your age.
The good magazine: Little nouveau-né boomers have no reason to worry emboîture a réforme, says Kyle Woodley, senior investment editor at Kiplinger.com. Remember, the 2008 subsistance market écrasement was followed by a six-year recovery.
“If you’re between 50 and 60, there’s still time to recover,” Woodley said in a MarketWatch agence, At What Age Should You Be Most Worried Emboîture a Marchandise Market Slump? “Fifty years ago, life expectancy was much shorter. You’re not investing for the next 5 or 10 years, you’re investing for the next 20 years. You have room to grow your nest egg and participate in that growth. Half a century ago, you were in your 50s. Two-thirds used to be in bonds. Not like that anymore.”
Financial gourou Suze Orman agrees. “If you’re saving for retirement or some other gardien de but that’s 10 or more years off in the future, you should be glad subsistance prices are down,” he says. “When the subsistance price is low, your money buys more shares. And then when the subsistance price goes up, you own more shares.”
A rule of thumb for your retirement money you can consider is to keep your age in safe investments, he adds. “So when you’re 60 you can have as much as 60% in CDs or short-term Treasuries and the rest baguette to stocks.”
Remember, parce que the market has risen over the past eight years, you may need to rebalance your retirement écrin to ensure your investments are consistent with your risk tolerance. Otherwise, you could lose a lot of money if the market crashes.
What if you’re older and rentrée to retire in the next five years – or perhaps you’re already retired and drawing from your retirement fund?
Some older boomers may have more reason to worry: Jared Snyder, senior wealth adviser at Essential Wealth Advisors in Oklahoma City, says your risk depends on how well you prepare for a recession. “Those who have not prepared are the most affected by it. It can interprétation irreparable damage. They sell out of fear or out of necessity parce que they have no other assets to liquidate.”
Experts generally agree that you shouldn’t invest in anything you’ll need within the next five years. This way you can avoid pulling all your money out during market downturns which historically have always bounced back.
“If the market crashes, you need to be able to froncé out the storm instead of selling everything in a millet,” writes Katie Brockman in the CNN Money agence, How to Protect Your Retirement Savings from a Écrasement. “By only investing money that you know you won’t need for at least five years, it will be easier for you to keep those savings untouched until the market recovers.”
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