On June 14, 2022, Fox Business reported that “Wall Street’s favorite recession indicator is flashing red.” The same day, AP News reported that an inversion in U.S. Treasury bond yields “raises worries over recession.”
For Americans nearing retirement, these sorts of headlines and news stories may seem discomforting, while those whose retirement is still decades away may assume there’s still plenty of time to readjust.
For me, stories like these represent opportunities and perhaps a call to action. The sooner we move to diversify and protect our portfolios, the sooner we can enjoy peace of mind—and the more time we have to course-correct as necessary.
Planning ahead and thinking long-term are essential to weathering economic uncertainty.
On June 15, 2022, The Washington Post published an article offering some financial moves consumers can take to prepare for a possible recession, which includes shoring up 401(k) and IRA accounts. As the article points out, “A record number of workers are becoming millionaires with their boring 401(k)s and IRAs. Many never earned six-figure salaries.”
Thinking long-term has been a bedrock of financial planning for generations. Putting together a well-diversified portfolio that includes saving for retirement may help reduce overall risk exposure, offering additional protection during times of possible recession or other economic uncertainty.
And being proactive doesn’t have to mean taking a “set it and forget it” approach. I also believe in the importance of regularly checking in and reevaluating our asset mixes and diversification strategies. As writer Matt Carothers states in an article published by Forbes on June 14, 2022, “People often focus on their finances when life changes happen or tragedy strikes—but just like an annual checkup with your doctor, it is important to be proactive by reviewing your finances annually versus taking a reactive approach.”
Planning ahead may also help you avoid calamity in the “retirement risk zone.”
Back in 2017, the American College of Financial Services identified the “retirement risk zone,” which encompass the final 10 years of working life and the first 10 years of retirement. This 20-year span is when nest eggs are both at their fullest and most vulnerable to loss. This vulnerability comes because of a relative lack of time for an asset to recover compared to assets that may experience negative movement more than a decade before retirement.
But by planning ahead and taking action when opportunities present themselves, we can help ensure that our portfolios are well-diversified and thus may be better protected against the sort of economic turbulence or financial shock that can severely impact a portfolio.
Precious metals can help protect your portfolio in the long term.
Precious metals like gold have a well-established history of increasing over the long term and providing an extra layer of protection during times of economic uncertainty. In our special report, “The Precious Metals IRA: Protection in the Risk Zone,” we explain how adding a precious metals IRA to your portfolio can help you diversify your retirement portfolio and enjoy the benefits of IRA ownership while also gaining wealth protection in the form of physical precious metals.
In a world where news outlets are flashing warnings of a recession and offering ways to protect your hard-earned wealth, it may be time not to just set immediate plans, but also to look to the future. Planning ahead can provide peace of mind, and precious metals can be an important piece of your long-term financial puzzle.
To learn more about the “retirement risk zone” and precious metals IRAs, CLICK HERE to request a FREE copy of our special report, “The Precious Metals IRA: Protection in the Risk Zone.”