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Retiring During a Market Crash
Manage episode 337162688 series 3379690
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When you're approaching retirement, what do you do if the market suddenly drops?
When it comes to financial planning, this has been the most challenging scenario by far.
Numerous recessions have occurred throughout the past 30 years, and we’ve bounced back from every single one. Remember the dot-com era in the 1990s? There were even a few in the early 2000s with 9-11 and the housing crash of ‘08.
Then, during the Coronavirus pandemic, the stock market experienced significant declines as a result of the newly discovered uncertainty, but it bounced back within 6 months.
Although, at the moment, recessions never feel temporary, when you take a step back and look at the markets’ behavior over a long period of time, you’ll see that volatility, peaks, dips, and overall long-term upward trends are all just part of the equation.
In this episode, we will talk about the different iterations of the economic crises that have occurred over the years, as well as the influence they’ve had on the general public. I’ve also included some pointers to get you through the next few months, lessons to learn, and an explanation of how to evaluate the market as you decide whether it is the right time for you to retire.
The lessons you will learn:
- We Will Recover
- Stress Testing your Portfolio
- Essential vs Non-essential Spending
- Emergency Funds
As soon as the market has reached its lowest point (and we won’t know when that is until after it’s happened), traders and investors can anticipate a robust recovery.
Those who sold their investments when prices were low are statistically unlikely to buy back in until the market has recovered approximately 18%. On the other hand, those who bought low reap the rewards of those steep returns.
In this episode, you’ll also hear:
- The tragedy of the World Trade Center attacks in 2001 and its impact on the stock market
- The velocity of the spending is going to help us get through the downfalls
- Essential vs non-essential spending and what does this mean for your retirement future
Must-listen moments:
[11:36] Stress testing your portfolio and know the stock market will recover
[15:33] Asking yourself if your portfolio passes the stress test by looking at your spending
[16:49] Emergency (Adventure Fund) and what requires you to tap into the cash you have
Links/Resources:
Establishing an “Adventure Fund”
Contact Danette Lowe:
Email: Danette@TruNorthWealth.com
Phone Number: 775-364-0010
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