For many of us, saving for retirement doesn’t mean just saving for retirement. We’re also looking beyond our own lifetimes and hoping to build a financial legacy that can continue to grow and support future generations. But what does building a legacy look like during times of economic uncertainty?
Predictions of recession may affect when some workers retire. This, in turn, may impact retirement portfolio strategies.
On May 31, 2022, Forbes wrote, “On top of current challenges created by severe talent shortages and rising costs, many economists predict the potential for a global recession.” In the same article, contributing writer John M. Bremen suggests that company leaders worried about a recession explore “flexible retirement” programs, which may result in early retirement for some employees and strategies to retain critical employees longer than previously planned.
If our nation does enter a recession and Bremen’s suggestions are taken to heart, many consumers may wind up changing their retirement plans. But if retirement plans change, so too might the desired level of risk exposure in consumers’ portfolios.
The truth is that none of us can predict the future—but as many of our regular readers know, I’m not one to dwell on uncertainty. Instead, I prefer to look for the best opportunities available right now and make the best decisions possible with that information. In that spirit, I believe when it comes to building our retirement portfolios and financial legacies, our best option may be to ensure that whatever may happen, the foundations of our plans are established in a way to help withstand the potential effects of economic uncertainty.
And that means diversification.
Diversification can help build a strong foundation for your financial legacy.
On May 26, 2022, Bloomberg senior editor John Authers wrote, “Times like these call for commodities. That’s what common sense dictates, and it’s one of those rare occasions when experience and theory agree; in times of inflation, commodities are a better bet than either stocks or bonds.” He went on to mention that commodities have, overall, grown since early 2021 when inflation first began to worry consumers. But his praise was also tempered by a discussion of the risks involved.
How much risk exposure you’re willing to allow in your portfolio is a very personal decision—one that depends on a variety of factors like your age, retirement goals, and unique financial situation. But one thing I believe every portfolio can benefit from is diversification.
On May 4, 2022, The Financial Times wrote that diversifying portfolios “is conventional wisdom for two fundamental reasons: risk and return…. By holding a variety of assets, which are not perfectly correlated with each other, [consumers] can shield their portfolios from unwanted volatility.”
Maintaining the appropriate level of diversification for your unique goals and situation may help contribute to the long-term success and stability of your financial legacy.
Precious metals like gold and silver have a long history as forms of generational wealth.
There’s no questioning the historic increases experienced by precious metals over the long term. And there’s no questioning these metals’ history of being used as hedges against market instability, market uncertainty, and global political unrest. For many families around the world, these assets have formed and will continue to form the bedrock of their financial legacies.
Gold jewelry or bullion coins are often used as generational wealth insurance, providing something physical that future generations can choose to sell or continue to hold as part of their own financial legacy. For those looking to utilize precious metals for their retirement portfolios, a precious metals IRA can provide unique benefits.
When considering my own future, I find myself continually coming back to a single question: If I can’t predict the future, what can I predict? And time and again, I find that the answer is the long-term stability that may be found in diversification—a stability that I believe can help form a solid foundation for a financial legacy.
To learn more about the benefits of diversifying with precious metals, CLICK HERE to request a FREE copy of our Gold Information Kit.