Rethinking Retirement Risk

Financial Mistake: Many individuals feel compelled to risk their retirement savings in the stock or bond markets in pursuit of potential returns. However, the majority prioritize the safety of their principal, particularly before and during retirement.

Rethinking Retirement Risk & Advice

In recent years, financial markets have experienced considerable volatility, presenting challenges to investors. The Federal Reserve’s strategy of significantly lowering interest rates to bolster the economy has resulted in a low interest rate environment. This has posed difficulties for those relying on fixed income sources or those attempting to safeguard their funds in banks, where principal protection is a priority. As a result, many believe their only option for combatting low bank savings or CD interest rates is to engage in riskier investments in the stock or bond markets. It is important to recognize, however, that stocks and mutual funds do not come with guarantees. Additionally, bonds carry their own set of risks, particularly related to interest rates and the financial stability of the issuer.

While there is a legitimate role for higher-risk investments in a diversified portfolio, this approach is not suitable for everyone. It is prudent for investors to consider that not all their funds should be allocated to potentially volatile assets. Stock brokers, financial advisors, and investment professionals often suggest products that involve principal risk. However, it is essential to ensure that the part of your retirement savings that you wish to protect is aligned with the expertise of someone focused on safe money strategies, rather than solely on high-risk investment options.

You do not have to risk your retirement savings!

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For more details, refer to our Professional Disclaimer.