The potential for a recession looms. With an economic downturn in the cards, savvy financial moves can help you stay afloat even when issues arise.
A survey of CEOs showed that 98% of them felt a recession would be coming. This doesn’t mean a recession is inevitable but it does mean it’s worth preparing for. Stocks dropped and the dollar rallied Thursday. The S&P 500 fell more than 2%, closing at its lowest level in more than a month. The tech-heavy Nasdaq 100’s losses exceeded 3%, with yield-sensitive stocks taking a hit.
Amongst the alarming headlines, you’re left wondering “So what can I do to protect MY nest egg?” The answer? A lot.
By making smarter financial decisions, utilizing available financial tools and cleaning the clutter out of your financial house, you can safeguard yourself & your retirement ensuring it can weather a potential financial crisis.
The little things really do add up when it comes to preserving day-to-day wealth. Do you have satellite TV? Consider dropping it and bundling cable in with your internet. Have you shopped around for car insurance recently? A quick search can give you lower cost options for your state.
If you have larger assets such as second homes or luxury vehicles, ask yourself if you need them should harder times come.
Are You Covered for Six Months?
Whether the economy is strong or showing signs of weakness, it’s important to have an emergency fund that can cover your expenses for at least three months though six is ideal.
Budgets can help with this process. If you take the initiative to track your expenses in real time over two to three months, you will then be able to determine where expenses can be cut. Once you have that monthly number dialed in, you can extrapolate over six months and stash that nest egg in a high yield savings account so that it’s accessible, but continues to grow.
Lean on Low Risk or No Risk Investments
Certificate of Deposit (CD): CDs are fairly straightforward investment tools. You hand your money to the bank with the agreement that you won't touch that money for a predetermined amount of time. That time varies, and can be anywhere from three months to five years. Once that CD reaches maturity, your money is returned to you along with interest accrued, with that interest rate being higher than a typical savings account.
High APY Savings: High APY (annual percentage yield) savings account is a great place to put money that you want to be able to access quickly, while also having it grow. These accounts are especially useful when inflation is higher as the banks that offer them will compensate by raising the interest rate offered.
Money Market: Money market accounts are similar to a high APY savings account; the difference being that you often have to maintain a certain balance. The APY is lower and transaction limits per month are in place. That being said, money market accounts give more immediate access to your money in that it can be withdrawn from an ATM.
Risk Management Strategies
Having a strong approach to risk management is more important now than ever in today’s volatile risk environment.
Most investments, even the most conservative, come with different types of risk. Understanding these risks will help you make educated choices in your retirement savings plan mix. Types of risk you should be discussing with your Fiduciary advisor include:
Wealth Preservation Strategies
When it comes to preserving your wealth, you should have an investment strategy for your assets, including risk management, and an estate plan for passing on your wealth. You should also develop a strategy for giving away your wealth.
When it comes to your retirement plan, diversifying your portfolio can also help ensure that your wealth is positioned well to bear the brunt of forces beyond your control. This is where a Wealth Preservation Expert can help.
Let’s Start the Conversation
NJM Wealth Preservation Strategies was founded on principles of transparency and with the goal of preserving your wealth for generations to come. With the potential for a recession higher than ever, we believe that taking steps to protect your wealth is crucial.
Here at NJM, our Wealth Preservation Specialist is a true fiduciary. We value our foundation of legal and ethical trust with transparency and have proudly helped 1000's of families across our great nation redirect their future by securing their financial well-being.
If you are interested in partnering with a firm who is will build a portfolio around your best interests and goals, while focusing on eliminating risk and preserving wealth, reach out today.
Kick off the New Year with a gift to yourself, your heirs, your future & your portfolio by learning how so many aspiring and official retirees like yourself have been placed back in control of their retirement.