Preparing for Retirement Series: Preface & Crashes Along the Way
How does someone begin preparing for a successful retirement? First, important questions need to be answered to define a successful retirement:
How do you picture your retirement? Will you spend your time traveling the world, volunteering in the community, or working part-time? Do you plan on staying in your house, downsizing or moving out of state? These are just a few of the important questions you should be considering. Once you know what you want, you need to find out where you are, and should be, at any age. This blog series describes some common mindsets people should have based on how many years they are from potentially retiring.
One thing worth touching on, again and again, are the market drops along the way. The stock market pullbacks of 20, 30, 40% happen more often than we all care to admit. We historically see a big one every 7 to 10 years, meaning whether you’re investing for income tomorrow, or income 40 years from now, there will be tough markets and uncertainty in your future. Your attitude and expectations will determine whether you handle these with ease.
Throughout your investing years there are going to be up years as well as down years in the market – this you cannot change; the only thing you can do is learn not to panic. Seeing your nest egg drop month after month can lead to some feelings of panic and despair; this is normal. But don’t let a market meltdown lead to a personal financial meltdown. How you keep your composure during this time can mean the difference between living in your kids’ basement or living on a beach when retired.
In short- be prepared to ride out a few crashes in your lifetime, and make sure you’re always invested according to your goals and risk tolerance.
Remember retirement success is unique to everyone. Feeling successful means you’ve set AND achieved your own goals and nobody else’s.
Our own Katie Junk wrote a fantastic describe where you should mentally be whether retirement is 40 years away or just 1. Each of those milestones has been posted as it’s own blog and posted right here on our website: SweeneyMichel.com/blog or read below on the road to retirement:
Check it out and let us know what you think!