I recently had the opportunity to share some of my thoughts about the best retirement savings strategies in an up-and-down economy in the Delaware County Times. The piece, entitled Having the right savings strategy critical today, appeared on Thursday, July 11: (http://www.danwhiteandassociates.com/dan-white-in-news.html). While I encourage anyone who is interested to read the whole article, here is the Cliff’s Notes version of the tips and strategies I set out in the article:
Stick it out: Younger savers between the ages of 18 and 35 can benefit from weathering the storm in stocks. The overall trajectory of the marketplace is still positive and they should continue to invest for the long term.
Staying engaged: Those in the middle (35 to 50 years old) may want to take a different and more engaged approach, however. Instead of buying and holding assets, a highly diversified portfolio may be a better and lower-risk option. Don’t give in to temptation and try and “time” the market.
Expect the best, prepare for the worst: Those nearing or already in retirement must be more cognizant of the market and more risk averse. Instead of low-interest bank accounts, seek out higher interest options like money market accounts or CDs, as well as alternatives like annuities.
Shaken, not stirred: Bonds are usually a safe, low-risk investment alternative, but the Fed has been suppressing interest rates for years, and those rates are beginning to rise. According to the Wall Street Journal, the 10-year yield could rise as high as 2.75% in the coming weeks—up from 1.76% last year and 1.85% this May. As interest rates rise, bonds bought at lower rates will lose value, making this a significant investment risk.