The Stock Market is Losing - What Could You Do?

Stay the Course When You’re Young

The stock market is losing. What do you do? This is something you really, really need to put and set in your mind. If you’re young and the stock market is losing, then you put your foot on the gas and you keep on buying. Why? Because you’re buying at those intervals, that dollar cost averaging. So if you’re doing it on regular intervals in your paycheck every two weeks, you’re buying in the lows, you’re buying in as it goes up in the highs, perfect.

Protect Your Nest Egg When Nearing Retirement

But what if the stock market is losing and you’re older and you’re getting ready to retire? What can you do? You might be really concerned and you say “Oh no, how am I going to afford to retire?” The whole portfolio is going down. Well, if it’s right at the beginning of the market loss, you might be able to prevent a little of the loss, but not typically.

You know, that’s why 401Ks, most all of them, allow what’s called an age based while working or in service withdrawal. TSPs also allow this, at 59 and ½. Why? Because they want you to establish the foundational income of your financial house. They want you to be able to do that. You can put up the walls and the roof only when you’ve laid the concrete foundation of your home.

The age based while working rollover is one of the things that you can take advantage of. If you want more information on that, then click here on this video talking about the very subject, about establishing your financial house. So if you haven’t done that yet, maybe it’s time to consider doing a partial rollover and make a plan.

Have Patience and Don’t Panic

But if the stock market is in turmoil, one of the best things you can do, believe it or not, is to not react. Stop. Slow down. You may have to hold on for a little bit longer than you wanted to for the recovery. We look back at the 08 financial crisis. Those that moved out and didn’t stay in there, when financial aid came from the federal government, they missed a boost.

When COVID happened, and everything fell sharply down, and then the financial aid came again, this time a lot faster, in six weeks, those that moved their money out missed that run up again. It may have taken quite some time to recover. And in 2022, when inflation hit, and the Fed raised the federal rate and interest rates, and the stock market plummeted again, what did you do?

Those that swept all their money out missed it again in 2023 when the market rolled back up again. You have to be patient. Bite the bullet. If there has been no market downturn and you’re within three years of retirement, it’s time to set your foundation and to make your plan solid.

Secure Your Foundation First

That way you can have success because the money that’s in your foundation will not lose. It can’t go up and down, which is different from the money that’s in the stock market, which is for long term growth. You don’t have to pull it out of the market plummets. You want certain monthly income amounts in a stable place. That’s what you want, isn’t it, after all?

And that’ll bring peace of mind again. So if you’re interested in more discussion about peace of mind, then click this video here, and it’s going to help lead to that calming confident mindset. Getting answers and an income plan could be just what you’ve been seeking.

A Different Playbook for Retirement

As you get closer to retirement age, you have to use a different investment playbook than when you were younger. It’s a whole different ballgame now that you’re 60 or 65. Most realize that as you get closer to retirement age, you got to pull back on risk, even if your heart doesn’t want to. Your mind says, “Hey, shouldn’t I be a little more circumspect or cautious now?”

Why, because you don’t have the time to recover anymore. If the market goes down and stays down while you’re pulling money out for retirement income, you could sink your nest egg. You can’t let that happen. You’ve got to have a smart plan in place to protect what you’ve worked so hard to build.

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Remember, you don’t need to work longer; you just need a better plan. If you found this blog post helpful, we’d love to hear your thoughts.