3 Secrets to Retire Confidently in any Market

In 2022, $3 trillion of retirement savings disappeared, at least on paper.₁

Your mind spirals with "what ifs" when you wake up from a deep sleep at 2am. The news keeps reporting big and sudden market drops.

You can't help but start worrying about how this will affect your retirement plans.

Bear markets are frightening, and you no longer have time to wait them out. You're not sure if you need to keep working a few more years - even though you might have had your heart set on a specific date.

Will you have to drop the plans you've made to visit the kids and grandkids?
Will you still be able to travel the world?
Can you still indulge in your favorite hobbies?
How many more years of waking up to an alarm clock might be in your future?

Perhaps you've already filled out your paperwork to leave when suddenly the market starts dropping - and doesn't bounce right back up. Or you're not able to keep working, and you no longer have the luxury of a salary coming in to pay your bills. Has your world just fallen out from under you?

Here are the critical answers you need today:

Should you retire when the market's so bleak?
Do you have to give up most (or all) of your dreams for retirement?
What can you expect when retiring in uncertain times - and what can you do about it?

Although times are scary, know that bear markets too shall pass. You're not the first to consider retirement in a declining market with potential losses. History shows there are successful ways to retire, even when the market outlook is bad. You can tap into this knowledge to help you make decisions.

This no-nonsense guide is for people just like you- who are ready to retire in the next 5 years and who need to make big retirement decisions in the face of a big stock market drop. You'll discover what to expect when rocky markets hit retirees. And, more importantly, what you can do about it.

You may be asking yourself questions such as:

Am I able to retire when I want to?
Will I need to give up on my bucket list?
ls there a need to find a part-time job just to get through?
What can I do with my investments to help me navigate the storm?
Do I have a trusted professional who can discuss my concerns with me?

If any of these strike a chord with you, then keep reading...

Secret 1: Buckets aren't just for retirement dreams

When stocks rise in the midst of a "bull market," it's easy to take on more risk than you would otherwise prefer: you're experiencing the reward side of the risk/return coin.

But when the market drops 20% or more (the technical definition of a "bear market"), you're facing the risk side.2 And that's often very uncomfortable.

Ideally, in retirement, you'd like to be able to wake up every day without worrying about your money! If you have too much of your money in stocks, you'll be anxious and unsettled about your future every time you hear about a market drop. Instead, balance your stocks and bonds with cash to balance your risk (and sleep well for your entire retirement).

You've probably created your retirement "bucket list", like an estimated 95% of Americans.3 But those aren't the most important buckets when it comes to finances.

Throughout retirement, you've got three periods of time with their own "bucket" of money.

Bucket #1. Within the next year

In the first period - the next year - you need cash for expenses. Figure out what your costs will be in the next twelve months, and make sure that you have enough cash for them that way, If the market suddenly takes a steep hit, you don't have to worry. You already have money that won't lose its value no matter what's happening in the stock market. But cash loses ground to inflation, which is why you only want one bucket of cash.

Bucket #2. The next 5- 7 years

The next period of time is within the next five to seven years, and this bucket is best with bonds (which provide fixed income). You'll have some income thanks to the interest payment or coupon on the bond. This bucket also doesn't fluctuate with the stock market. When you start running low on cash, you can sell some of your bonds. Whether the stock market's in decline or not doesn't affect its value.

Bucket #3. The long run

Cash and bonds don't keep up with inflation over the long term. So you need stocks (equities) in the third bucket, which will allow your money to compound over the years. As the cash and bond buckets run low, you replenish them by selling stocks - but only when the stock market is performing well.

Critical questions to ask yourself:

Am I taking too much risk to sleep at night when the market "goes bad?"
Do my current investments fit this "bucket" system, or should I make some changes?
Given my personal circumstances, how much money should I have in each bucket?
Is there a financial professional I trust to help me make these decisions?

...To see secrets #2 and #3 please be on the lookout for my upcoming webinar on this topic.

Sources:

Snappy Kraken

https://www.cbsnews.com/news/stocks-drop-recession-retirement-savings-401 k-ira-3-trillion-2022/

https://www.weforum.org/agenda/2022/06/what-is-a-bear-market/

https://www.provis ionliving.com/survey-reveals-whats-on-americas-bucketlist/