How to Protect your Retirement in 2022

The stock market is declining and worry kicks in! Not to fear!

1. Is it too late to diversify?

2. Before we overreact… How can you apply simple spending wisdom?

3. The news might tell you to be anxious but what does your financial plan say?

Protect Your Retirement in 2022

Show Notes:

• 10 rules to live by during a bear market
• Preparing for the next bear market in stocks

Full transcript:

SPEAKERS

Anthony Saffer & Alex Okugawa

Full Transcript:

Alex Okugawa 0:00
The stock market has taken quite a bit of a tumble this year. And so today we’re going to talk about some of the things that we’re hearing from clients, and three things retirees can do to protect their investments and income. Stay tuned.

Hey, there, it’s Alex and Anthony, from One Degree Advisors. If you’re new here, we’re certified financial planners, and we help folks with all things tax investment, and retirement-related. You know, Anthony, the market is down quite a bit this year. So you know, sometimes we hear from clients, they’re a little bit concerned about what’s going on in the market, interest rates going up inflation, things aren’t looking all that rosy on the horizon. And so sometimes it’s good to take a step back and just ground us into what can we focus on that is going to make an impact long term for folks. So the first thing we have here is, you know, when you look at your investments, diversify, go back to the age-old diversification.

Anthony Saffer 0:57
We wrote a post last year on how to prepare for the next bear market we didn’t know we’d be here so quickly, but it’s always a possibility. And one of the main things there is to ensure that you have enough cash, and even bonds, which tend to be more stable, now they are coming down, you know, some of them are at least part of the barn bond markets are coming down, but to be prepared to provide for your income with conservative investments.

Alex Okugawa 1:21
Yeah. So again, we’re just when we have this on the screen, this is at least how I visually think about it. When you think about your portfolio as a whole, look at that little slice and say, How much do I have in bonds? What is my dollar amount? So if I’m taking income, right, how many years of income do I have? And my bonds, which again, if they’re on the shorter-term side of bonds are typically more stable?

Anthony Saffer 1:43
That’s right. I just actually worked on a client’s account yesterday, and we were generating some cash for their income for the next several months. And what we looked at was just saying, okay, the more conservative bonds are short-term bonds, the inflation hedge bonds, which have done pretty decently or at least comparatively, is just shaving that off a little bit, providing some cash. Now they can sleep at night because they have income for the next six months.

Alex Okugawa 2:04
Yep. So again, the first thing is diversification. But the second thing is pretty straightforward. Don’t over withdraw.

Anthony Saffer 2:10
Yeah, I mean, when you look at this, and we saw this a lot in 2008 when things were really bad then, is just taking out a little bit less if you can, and that’s just prioritizing expenses. That’s where you can help sustain your investments, not over withdraw, prioritize your needs versus your wants, doesn’t mean you need to fully cut back, but just saying, hey, where can I cut back for a few months, until things hopefully get better

Alex Okugawa 2:34
Tighten up the belt a little bit, prioritize your spending, getting get back to what’s most important. The third and final thing here is just getting back to your financial plan.

Anthony Saffer 2:45
The news cycle is, is punishing, right? It’ll tell you every worst-case scenario in our minds will tend to go to that, that worse place, I’m going to lose everything, I’m going to be on the streets, I’m not going to have any money left for retirement. And while we don’t know what’s going to happen tomorrow, if we have a good plan going in, and we know you know, our retirement projections are sound and we’ve been there is to go back to that. And even if there’s some decline, okay, a good financial plan should essentially, factor in that there are going to cycle in the market, right? Going back there and saying, there may be a little bit of digression. But hey, things aren’t as bad as it seems.

Alex Okugawa 3:23
Yeah. So real quick, I want to recap these, because I think they are so powerful, they’re simple, but it’s the best thing retirees can do, especially in a market environment like this, to not let emotions take over again, is to have that diversification piece in play that is so powerful, especially in a market when it seems like everything is falling across the board. Having diversification can help because some things don’t fall as fast. Again, the second thing is don’t withdraw. You saw this in 2008. Those folks that we’re able to tighten up the belt a little bit are much better off. And then the third thing is ground yourself back into that financial plan, really take a look at well, where are we at? How are things going? And that grounds you so you don’t let emotion take over? I’ll end on this couple quick lessons for folks is don’t allow emotions to dictate bad decisions and put you in a worst-case scenario kind of like you talk to her you see the news, it puts us in that worst-case scenario, mental mind frame. And Matt wrote a post 10 rules to live by during a bear market. So we’ll post that in the show notes. Great, great, real, quick read. Another thing is focused on what’s important in family relationships. I mean, we saw this in COVID. Right? A lot of people weren’t focused on the markets, per se, they were more focused on their health, spending more time with their family getting outside, and not having to commute as much. And that was a good thing that came out of COVID. So bringing that back, centering it back is important. And the last thing here is just preparing for the next time, right kind of like you said earlier we made that post preparing for the next bear market in advance. Prepare yourself now so that when the next drawdown comes, you’re ready. And now let us know what you think. Does this bear market have you concerned and if So, what are you doing about it? Leave your thoughts in the comments below. And if you know someone who might enjoy this video or might find it helpful, especially maybe a recent retiree or someone who’s a little nervous about the markets, we’d love for you to share that with them. Hopefully, it helps them out and can make an impact. If you enjoyed today’s video, please like and subscribe for more. Thanks for watching.

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This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. Disclosures: https://onedegreeadvisors.com/solutions/#disclosures