Retirement Planning When the Economy is Rough

Although times are uncertain, there are tried and true methods to putting money away for your loved ones while living comfortably during retirement. Planning your steps and anticipating costly charges associated with passing monies to your next generation are essential with this kind of planning. It is also wise to consider your step families and how they will be taken care of during your transition into retirement. Securing your estate and creating the accompanying documents with your will such as a living will, health care proxy and a power of attorney will ensure that your transition is successful.

Regardless as to what the economy is doing, measures can be taken for planning your money appropriately to maintain its value, despite inflation and despite the rough downturns in the market, allowing your retirement funds to take care of your family’s needs no matter what. Planning for retirement as well as after you pass away is both responsible and necessary. The best place to start is with a will, which will help to determine where your assets are going by listing your beneficiaries. You will also want to put a power of attorney in place to determine who will make the legal decisions for you when you pass on. Although these changes will be most necessary after you pass on and not during retirement, you don’t want to wait until its too late for your family to worry about these important measures.

Planning in order to secure your retirement during the “new” recession that we are in is a necessity. You will first want to ensure that your assets are protected and that they are not being bled through due to the drop in interest rates. If you have found that your investments are bleeding, you will want to move them immediately to a place where they will stop dropping in value. As your assets drop in value, you lose income as well, so it is important to rescue your asset first before worrying about what else should be done to it. Once you rescue your asset, you may want to consider changing banks in order to increase your interest rate on your accounts. Many accounts have promotions that will increase your interest rate and even double your income for that account.

Reducing your consumption during retirement is also a great way to plan and save your real income from being depleted during these rough economic times. If you create a budget that includes your expenses so that you can easily see what you can reduce, you will increase your income by what you are not spending. This method helps many people to recover from tremendous income losses, and you should look into it seriously in order to improve your income.

Recession-Proof Retirement Income Planning

It can be scary to watch your assets decline when you are in retirement or looking forward to retiring. We are in what is considered a “new” recession, where The Fed is not doing what it normally does during a recession to keep afloat. Instead of raising interest rates, The Fed is lowering them, which impacts CDs, money market accounts, savings accounts and bonds – all of the investments that individuals who are retired depend on to create money for them. It can be very frustrating to watch your assets decline as the cost of inflation continues to go up. Not to worry! There is a way to plan and save your assets and increase your income up to 100% just by making some necessary changes to your portfolio.

The most important plan to implement during this “new” recession, is the plan that requires protecting your net worth at retirement. Your assets are currently being depleted due to the drop in interest rates, however, it is possible to temporarily move your assets to classes that do not suffer a drop in value, just until the economy can recover and you can regain the momentum you built with your asset up until now. You do not want to continue to let your retirement assets bleed dry, as this reduces your income as well. Examine your portfolio and determine which of your assets is more likely to suffer a drop in value and then determine where you should move those assets from there.

Planning by examining how your retirement is affected by inflation is a great way to offset what affect inflation has on your income. Your real income becomes reduced when prices in health care, gas, and food rise. If you examine what your Personal Price Index is, then you can avoid inflation issues by reducing the things that you use, if you can, that are directly affected by those changes. As an example, if you purchase food that is a store brand instead of the name brand you can save yourself money and can offset the pinch of the rise of inflation in the same process. Choosing a gas station that has cheaper gas can help you cut your consumption as well as help you avoid some of the sting of inflation as well.

Creating a plan to reducing your consumption during retirement is an excellent way to protect your fixed income as well. If you create a budget for your home that shows what your expenses are, your ability to see where you can cut your consumption will be much more clear. You can double your income simply by choosing not to spend money on unnecessary items and by switching to generic brands instead of purchasing more expensive items as you regularly may have been doing. Careful planning will help anyone to secure their future financial needs.

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