Consider it the new normal: planning for financial success in uncertain times. While it can be tempting to hold off on making decisions or taking action, waiting to see what changes future legislation may bring isn't likely to help you reach your retirement goals. In fact, now may be an opportune time to plan for the future and make sure you're on track for the retirement you've always dreamed of.
"Trying to time the market is a loser's game," says Robert R. Johnson, president and CEO of the American College of Financial Services. Instead, investors should create a long-term strategy that guides them through the expected ups and downs of the market—as well as more tumultuous conditions.
What that plan looks like depends on the investor, their retirement goals, and how close to retirement age they are.
Soon-to-be-retirees are in what Johnson calls the "retirement red zone," likening it to a football game. "Just as a football team can't afford a turnover when they are inside the opponent's 20-yard line, an investor can't afford a turnover when they are within a few years of retirement," he says. If you're close to scoring your retirement touchdown, Johnson suggests dialing down the risk in your portfolio. That way, you're protected if the market falls closer to your retirement.
Although younger investors have time on their side, since they can bear more fluctuations in the market, they too should be playing the long game, says Johnson. "Building a well-funded retirement is a marathon, not a series of sprints," he says. "Take a long-term perspective and your odds of success increase dramatically."
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