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5 Tips For Retirees to Ease the Pain of a Market Decline

When you are living off sildenafil citrate your investments and your social security, it is devastating to watch your portfolio go down in value substantially. You do have options to safeguard your portfolio value. Base your action on what your plans are for the Fluvoxamine Your lifestyle, income needs, inflation projection, and more need to be taken into account. There is no chance for a do over. You won't have the time to make up a severe loss in your nest egg. But you always have the option of going back to work part-time or full-time.

Carefully consider these 5 tips to cope with the pain of a market decline:

1. Start to withdraw less each year. If you were taking a 4% withdrawal, take a 3.5% withdrawal this year and a 3% withdrawal the next. Seems small but just by taking less you can help a damaged portfolio last longer.

2. Don't switch to a higher percentage in bonds. If you do, you will miss out on the higher average returns that stocks can provide once they recover.

3. If you were increasing your withdrawals to match inflation, stop. Draw out the same amount each month, quarter, or year without an inflation increase. Again, this little bit will help keep your portfolio from dropping even further.

4. Studies show retirees will spend a lot when they first retire and then their spending patterns will taper off. If this matches your retirement plan, then you may have to switch gears and lower your spending plans now and increase it later.

Recent retirees will plan for a conservative portfolio now and a more aggressive one later in order to maintain longevity.

5. Retirees receive their income monthly, quarterly, or annually. That can reduce portfolio longevity in a down market. Consider keeping 2 to 5 years of income in cash and cash equivalents for spending in order to preserve value.

None of the above tips will guarantee that your nest egg will last as long as you do. But they are tips that can help decrease the slide in value that can rapidly occur when you are withdrawing money while the assets are declining in value. You want to plug up that hole before you lose so much that it will drastically affect the retirement lifestyle that you planned for. Setbacks are okay but major setbacks due to inaction are painful late in life. Take control of what you can do to keep your portfolio growing while you are withdrawing. Your future lifestyle depends on it.

2008 Fern Alix-LaRocca CFP All Rights Reserved

wholeheartedwayhow-it-worksFern Alix-LaRocca is a Certified Financial PlannerTM and Financial Coach with over 24 years experience as a fee-only Financial Advisor. Stop losing money and increase your net worth by subscribing to her free e-newsletter at wholeheartedwaywholeheartedway - You will get 4 free bonus reports and your information is always confidential.

posted by biibj @ 7:44 AM