6 Ways To Recession-Proof Your Retirement

ways recession-proof retirement planning savings

Sure, your retirement is 20 or 30 years away. 

However, that doesn’t mean you shouldn’t think about upcoming recession (or future economic recessions) and how it can affect your quality of life after retirement. 

The good news? 

You can recession-proof your retirement by implementing the six strategies below today. 

1. Operate A Gold IRA 

You need to make well-thought-out moves. Still, that isn't enough. Inflation can affect even the most calculated investment choices. 

You will, therefore, want to protect your retirement from recession. And because gold has been the standard of wealth for many years, partnering with a gold IRA company can be your best bet to safeguard your investment against inflation. 

Apart from being used to make jewelry, gold is the primary component in mobile phone circuit boards since it is chemically stable and an excellent electricity conductor. 

Besides, gold isn't subject to government subject rules. With a gold IRA account, you can invest in physical gold, bars, coins, and other IRS-approved precious metals, including silver and palladium. 

2. Decrease Your Stock Exposure 

Whether there’s a recession or not, a deep-rooted theory is that you should move your portfolio to become conservative as you grow old. 

As you usher your fifties or get into retirement, you should slowly increase your exposure to bonds and reduce stock investments. 

And if you’re unsure how much money you should allocate to bonds, follow the standard below. 

As a rule of thumb, you should lock at least sixty percent of your investment in high-value bonds if you’re a couple of years from retirement and ramp it up to seventy percent when you retire. 

3. Leverage The Bucketing Strategy 

Apart from diversifying your investment across multiple assets, it would help if you also have a few investments meant for short-term and long-term retirement funding. 

For retirees or people about to retire, it would be best to use a bucketing approach when investing to enable you to have a mix of investments that can fund your current budget, soon or later — instead of one big portfolio with several assets for one goal. 

If you are about to retire, it makes perfect sense to invest more conservatively, especially if you will need part of your savings sooner. 

4. Work With A Financial Adviser 

In a study conducted by the Journal of Retirement, people seeking expert financial advice add 15 percent to their retirement income. 

Even if you think you have created a solid retirement plan, getting a second set of expert eyes is always a good idea. 

And the beauty of it is that you can quickly get a reputable financial adviser in a couple of minutes. 

Indeed there are no guarantees that an expert will do better than you. Still, seeking additional investment advice can help you develop a better plan, protect your assets, and, most importantly, give you peace of mind that comes with knowing you’re on the right track. 

5. Venture Into Commercial Real Estate 

Real estate is a reasonably safe investment because people will always require a place to live. Sure, there is a sharp rise in e-commerce. Still, some businesses can only thrive in a brick-and-mortar setting. 

You can partner with a commercial real estate (CRE) investment company to help you overcome the hassle of looking for tenants. 

The best part of working with an investment company is that you don’t need a lot of money to buy in — some companies allow people to invest in real estate with as little as $100. Like any other retirement investment, you will need to add more money to grow your portfolio over time. 

6. Create An Emergency Fund 

If you have cash lying around, consider holding it in a high-interest insured account. That way, your money can maintain its value when markets falter. 

On top of that, money held in such an account is highly liquid, allowing you to access your cash quickly if you lose your job or face a salary cut. 

When you have your own money, you won’t have to incur debt to cover unexpected costs or job loss. Besides, credit tends to become scarce during a recession. 

Once the economy opens up, you can use your emergency fund to cater to crucial expenses while maintaining a tight budget. 

The Bottom Line For Retiring Right

You can implement many strategies to protect your retirement against a recession or economic downtown. 

The idea is to look for several options that can work for you without straining your current financial obligations

No matter what you decide to do, make sure you build adequate protection for your retirement. The last thing you want is to hope and pray that everything will work out once you are retired and unable to work much more.

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