One thing you may not have heard, though, is how you can use the COVID-19 crisis to do something besides worry. Instead of it being a doom-and-gloom conversation, you can think of a few ideas on how to react.
We all know the global markets took a hit in the first quarter of 2020. The numbers go up and they go down — rapid changes definitely come with the territory right now. Unfortunately, we have all seen the significant downward trend. We also have seen the positive second quarter boost up in the trend. When there are ups and downs in the market, everyone has his or her own level of comfort or discomfort. We call that level “risk tolerance.”
Any forward-looking plan for retirement income involves some level of risk. Risk tolerance is a way to measure each unique retiree or pre-retiree’s comfort level with that risk. Your existing retirement income plan was based on your long-term risk tolerance that you and your advisor determined, considering a variety of factors.
It is one thing to think about theoretical market ups and downs, but when the volatility is real, people can sometimes feel differently about it. We have been living with this volatility for many months now. The question we must ask ourselves is whether our retirement plan can withstand these ups and downs of the market.
Financial services professionals know that their clients are depending on them as a resource on their journey to living the retirement of their dreams. So, it is especially important for them to be available to their clients during times like these. Email, texts and phone calls with your advisor should be available to you to give you the assurance of your financial plan.
One of the reasons it’s so important to be there to guide clients through thick and thin is to help retirees and pre-retirees avoid making rash decisions. People are going through a whole lot of emotions right now, and it’s understandable. But, those emotions can work against your strategy for retirement if they drive you to make spur-of-the-moment, reactionary decisions.
A great way to avoid rash decisions is to try to find some perspective during a time of turmoil like this. Yes, the markets have been down and are now up, and yes, it is concerning, wondering if they could go down again. But when you have a strategy for income in retirement and you revisit it regularly, there’s no need to completely change course. Take a step back and take a high-level look at your goals in retirement. Often, you’ll find that one of the options that you want to consider is staying the course, because history shows that the market tends to bounce back.
Nothing is guaranteed, of course, and everyone’s unique path to retirement depends on the specifics of their situation. That’s why it’s good for everyone to have a trusted financial services professional who can walk each individual through the specifics. QCBN
Contact American Financial Investments, LLC today to get started on a strategy that can help take you to retirement and beyond.
By Ronald Stevenson and Barbara Clark Stevenson
Ronald F. Stevenson & Barbara Clark
Stevenson own American Financial Security, LLC. They specialize in Retirement Income Planning, Social Security Maximization, Tax Free Income Design, Personal & Corporate Tax Preparation and Planning. For more information, call 928-771-8368 or visit AFSprescott.com 3112 Clearwater Dr., Suite B, Prescott, AZ 86305
Ronald F. Stevenson offers Advisory services through American Financial Investments LLC a Registered Investment Advisor in Arizona.
Insurance products and services are offered through American Financial Security, LLC.
American Financial Investments LLC and American Financial Security, LLC are affiliated companies.