Before I became an agent at Paradigm Life, I worked for many years as a stock broker. When the economy was on a down swing I would advise my clients to, “invest for the long-run.” During bear market periods I wanted clients to see farther than the moment at hand, and hold their positions until we could see corrections-even if they were slight.
Some clients though, who depended on returns for retirement, did not have the time to wait, so in distress would quickly sell portions of their 401(k)s and IRAs to provide supplemental income.
Whether you are reacting to a bear market, or preparing to retire in a bear market, there are immediate solutions that can mitigate this plight.
1. Buy Yourself Time
According to a MetLife Survey, the years immediately before and after retirement are the worst times to lose money. And of course, there is no good time to lose money. But, when trying to fight against market volatility you have to buy time-how?
Consider Working Longer
It’s the last thing you want to hear, but a few extra years working income will postpone you tapping into your valuable assets too soon.
(“Retirement Income and the Sensitive Sequence of Returns,” authored by Moshe A. Milevsky, Ph.D. and Anna Anaimova, 2009 – MetLife)
2. Diversify
As a person who advocates and sells Whole Life Insurance, I constantly educate clients on how diversifying doesn’t just mean diversifying in the market. You need to create a solid platform of assets like:
-paper
-gold and silver
-mutual funds and bonds
-Whole Life Insurance
Whole Life Insurance or Cash Value Insurance is a tool that allows you to optimize other performing investments. For instance, with retirement, when the market is down, you use the cash value of your whole life policy to supplement income. When the market is up, use your 401(k) or IRA. The same support from your policy also goes for all preforming assets. In short, Whole Life Insurance is a safety net.
3. Get Help and Make a Plan
A lot of my clients have retirement questions that should have been addressed years earlier. Don’t feel bad if this is you too. Many baby boomers who invested in 401(k)s found themselves at a loss when they realized retirement in the next 5-10 years seemed unattainable (usatoday.com). The Best thing to do now is get help. Education is everywhere (Infinite 101), not to mention that we offer free consultations with any agent to help you get on track for retirement.
Retiring during a bear market doesn’t have to be painful. When meeting with a Paradigm Life Agent, ask him or her to show you the VOLATILITY BUFFER, and you can correctly calculate with a professional, the right numbers to help keep you secure during your non-working years. To find more information about Whole Life Insurance and Retirement visit our Resource Page.
Justin Martin
