By: One World Publishing.
From the very beginnings of their careers, many Floridians have been pouring funds into retirement accounts. Many younger people don’t pay close attention to those accounts, but as your career progresses, you might find yourself sharpening your investment strategies as you get closer to your target retirement age. Ty J. Young, founder of Ty J. Young Wealth Management, offers wisdom for Floridians looking to rebalance their portfolios for today’s economy.
Of course, not everyone has a solid understanding of the stock market or the risks they might be taking with their investments. So what concern should be top of mind for people hoping to retire in the next five years? Unfortunately, for those counting on investments to support them through retirement, the potential risks can be dire.
Macroeconomic Risks and Your Retirement
“Their greatest concern is always losing their money,” Ty says. “The market has corrected or crashed 15 times in the last 50 years. If your money is subject to market risk, and you time it wrong anywhere near or in retirement, you are at risk of running out of money. It happened unnecessarily to so many people in 2008.”
Unfortunately, the risk of a stock market crash or correction isn’t the only thing threatening your retirement. Ty notes that there are several other macro risks — including higher taxes, inflation, incompetent government leaders, and global instability — posing a considerable threat to the already embattled U.S. economy.
No one wants another 2008, but there’s a distinct possibility that there’s another recession on the horizon. It’s easy to feel powerless when facing a potential economic downturn, but Ty has some advice: save money when possible, keep a close eye on your budget, and invest the right way.
“The smart investor has their retirement money and investment portfolio in vehicles that provide a reasonable rate of return and protect you against market losses,” Ty says.
What You Can Do to Protect Your Money
If you are familiar with the investment world, you might already know that in a situation like this, fixed index annuities provide guaranteed returns that are completely insulated from losses. In the present economic conditions, Ty’s clients nearing retirement sometimes invest more in fixed annuities.
“Literally, with this product, you go up with the market, and your gains lock in, and when the market goes down, you don’t lose anything,” he says. “Why more people don’t use this product is a mystery.”
Fixed annuities are a way to grow your money without risk. When you invest, you agree to a fixed index rate and a set contract term. Thanks to the fixed interest rate, you’ll know how much interest your annuity will accrue and have an idea of the monthly income stream the annuity will pay you in retirement.
Notably, the growth in a fixed index annuity account is also tax-deferred. That’s good news for any financial product that accumulates interest. It means that more money stays in the account over time, and more money in the account means more interest.
Some annuities also offer a death benefit. This means that if you die before annuity payouts begin, the money will be paid out to your children, grandchildren, or other specified heirs.
The Time to Safeguard Your Investments Is Now
Impending recession or not, it’s generally a good idea to reassess your portfolio on a regular basis and rebalance it if necessary. And when something as important as retirement is on the line, it’s best to consult a financial advisor or other financial professional.
An advisor will be able to take your goals and current portfolio into account while creating a plan to maximize growth before you retire.
Disclaimer: This content is for informational purposes only and is not intended as financial advice, nor does it replace professional financial advice, investment advice, or any other type of advice. You should seek the advice of a qualified financial advisor or other professional before making any financial decisions
Published by: Khy Talara
