Protecting your nest egg
Imagine approaching retirement and watching your portfolio be cut in half. Maybe you don't have to imagine, because it happened to you in 2008.
While there are no surefire ways to avoid a stock market crash, there are some things you can do to reduce the likelihood that you will suffer the consequences of one in the future. Here's how to protect your savings from a significant downturn in the financial markets.
Download PDFTwo ways to protect yourself
Don't invest in the stock market
The best way to avoid a crash is not to get involved in the stock market in the first place. However, you aren't likely to get a decent return without putting at least some of your money into equities. And few people can save enough to retire comfortably without the help of compounding investment returns. However, there are some relatively safe ways to invest without losing your money to a crash.
Play it safe with fixed and fixed-indexed annuities
If you want to avoid stock market volatility, still make a return and are willing to hand over a chunk of cash to an insurance company, an annuity will give you both safety and growth and can provide fixed payments for a set period of time or even the rest of your life. If you're looking for guaranteed returns, and don't want anything to do with the risk of the stock market, annuities might be a good option for you. For example, if you find a five-year fixed annuity paying over 3 percent, at least you are able to offset inflation.
With bank interest rates too low for too long and a stock market that goes up and down based on the latest news headline or Presidential Tweet, it's as important as ever to understand ALL of your options when it comes to protecting your nest egg. Risk is not your friend when you retire.
Linda is licensed to help you keep your money safe.
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