By Cheryl Poryanda, SVP, Webster Bank
A volatile economy has become the New Normal. The Fed cuts rates for a third time, signaling slower growth. And people are wondering about their retirement plans—and the right moves to make.
We’re seeing clients look for increased safety as the market turbulence continues—moving to FDIC-insured vehicles, for example. Many are looking at shorter-term investments, such as 5-month rates, to respond to uncertainty ahead.
Where are you going? What do you need to get there?
It helps to look at the specific plans you have in mind for the next two, five or ten years. Buying a home or second home? Planning that big trip? Starting or expanding a business?
Once you know where you want to be, you can structure your investment portfolio to help you get there: matching investment maturities with the times you’ll actually need the funds. A CD laddering strategy can be one solution to accomplish this.
You need to find the right vehicle for the right time.
That’s the number one reason to have an objective look at your retirement plan—or need for one. In a time of economic uncertainty, a retirement check-up should be as regular as your annual physical.
An objective review will not only clarify what you need to get where you want, it can reveal options you may not know about. It can keep you on top of tax considerations. Above all, it can give you a clearer picture of your retirement possibilities.
If you have a plan … and if you don’t
If you’ve already charted a retirement plan, stay the course—but that doesn’t mean staying still. You may need to tweak your investments to respond to your current situation. If you haven’t started saving for retirement, the time to do it is now—the earlier you start, the better your results.
Avoid the trap that impairs even successful business people: They’re so focused on running their business and providing security for their employees, they neglect their own retirement.
Three generations, one piece of advice
Today the Baby Boomers are retiring—and finding themselves to be the Sandwich Generation. They’re wedged between their young adult children, not yet established in their careers, and the responsibilities of elder care. While the Boomers saved conscientiously, the additional obligations are putting a strain on their retirement funds.
Millennials and Gen Z consumers have the potential to be a great generation of savers. They’re thoughtful about credit. They tend to be more mobile and less tied to homeownership. They’re also socially aware and focused on the impact of the future. By staying true to a savings discipline, they’re positioned for greater security as they near retirement.
But no matter where you are in life, follow my father’s time-honored advice: Pay yourself first.
When each paycheck comes in, even before you pay your bills, set aside an amount for retirement. Even small amounts, consistently, will build security for you.
When did you last review your retirement plans?
As 2020 nears, do you want to feel more in control of your future? Make a date for a retirement review before the New Year begins.
Especially in a turbulent economy, when so much can change so quickly, it makes sense to review your situation once a year.
A firm grasp of the facts and an up-to-date plan will help you move in 2020 and beyond with a fresh sense of confidence.
The opinions and views in this blog post are those of the authors, and are not intended to provide specific advice or recommendations for any individual. All loans are subject to the normal credit approval process.
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