Managing your finances is a priority, whether you're well off or just getting by. There are resources available to seniors to help with financial obligations. Remember that financial resources do not guarantee happiness, that is found in your heart and soul.
Socially responsible retirement investing
The concept of socially responsible investing has been around for many years, but it has taken on new significance today with investors given Global Warming, animal and gun rights, social justice, health, consumer protection, human rights and so forth.
Now, more than ever, investors' funds can be both a statement about and impact on how morally and ethically business operates in a Globally connected World. If you use an Advisor to manage your assets, or whether you do it yourself, you have more choices to express your values. Think about the causes and Global conditions that most matter to you, your investment portfolio - whether grand or simple - should reflect that.
You may learn more about this topic at https://en.wikipedia.org/wiki/Socially_responsible_investing The New York Times has an article to help you get started investing with your values in mind. https://www.nytimes.com/2020/02/14/your-money/how-to-build-an-esg-funds-portfolio.html?searchResultPosition=1
The market will fluctuate - don't panic
It's well known that the stock market fluctuates, sometimes wildly in either direction. Investing is supposed to be for the long term, riding out the ups and downs. It is natural to panic when you see your investment holdings, 401k and/or IRA losing value during a downward market trend. There are some tried and true recommendations at a time like this - don't sell out, don't try to time the market and stay calm. The "Market" will correct and you don't want to make a mistake at a time when it appears it is in freefall. If anything, review your investment composition to make sure that it is positioned for your retirement goals and lifestage (still investing for retirement, retired etc). For additional information, check out: https://www.aarp.org/money/investing/info-2020/retired-investors-bear-market-concern.html?intcmp=AE-MON-SI-BB for additional investment information
The Economy, the Pandemic's end and You
The year 2020 entered on a positive financial note. And then the COVID-19 pandemic hit World-wide. The United States economy had rapidly deteriorated, unemployment rose to an unprecedented level, and the Treasury stepped in at unbelievable levels to shore up the economy. Not since the Great Depression has the economy suffered so, even the 2009 Recession pales in comparison. All this could not be alleviated given the massive effect of the virus on a Global economic basis. Individual balance sheets have taken a massive hit, the net worth of senior citizens has rapidly deteriorated. It's grim but not forever. Understand that the US economy was artificially brought to a halt in a effort to stave off and avoid a pandemic level of death due to the virus.
While retirees relying on social security have a base level of income, income from other retirement sources may have been greatly harmed. But, as the article above mentions, don't panic but try to weather the storm, clamping down on expenditures and practicing health options to stay healthy and safe. The stock market will come back once the virus has dissipated, much as it had done since the 2009 recession. There will be opportunities to increase/augment one's retirement portfolio. Do not panic, remain calm. Don't re-arrange your retirement portfolio to try to time the market or obtain liquidity. Don't sell out of fear.
What is necessary, though, is that retirees take advantage of any services, discounts and benefits that may be available during the virus pandemic. If you are having trouble paying your rent/mortgage, contact your landlord/mortgage lender for relief. If you have credit with payments coming due, contact the credit card companies to ask for forebearance, if you have financial issues impacting your ability to buy food, contact social services. There are resources available to help during the virus economic crisis. Don't forget that if you have been laid off due to the virus situation, apply for unemployment immediately. If you have a small business or are an independent contractor, search out the SBA lending for small businesses. Have groceries and prescriptions, meals and more delivered. If you need assistance, don't go it alone, ask for assistance from social services and otherwise, and keep in touch with your neighbors. Keep tuned in to National events, economic, social, health and so forth.
Stay positive! This too shall pass.
Investing for Now & the future
Whether you use a financial planner or do it yourself, your investments need care and grooming to develop a portfolio suited to your lifestyle and financial needs. One thing is certain, nothing is certain when it comes to investing. "In the long run we are all dead" is an apt expression coined by the noted Economist John Maynard Keynes. https://www.businessinsider.com/john-maynard-keynes-niall-ferguson-gay-comments-future-generations-2013-5#:~:text=But%20the%20full%20line%20is,the%20ocean%20is%20flat%20again.%22
But in the short-term, it is never recommended to try to time the Market or chase financial quick gains. While as a senior you may not have years and years to invest, you need to keep apprised of how the Market is doing as it affects your retirement portfolio and its composition. Even if you're not so senior, changes that are or will be occurring due to Federal Reserve, governmental policy, cultural and health changes, Global Warming and new technology should catch your eye as something of interest to view in terms of your investment portfolio. Also take into account whether your portfolio investments match your personal beliefs as your portfolio can be tailored to avoid certain types of investments that you may not personally endorse.
Don't be tempted to "jump on the bandwagon" when a low priced stock's price is going up and up. The recent GameStop situation is one way to follow herd mentality for short-term gain, but it can also be a dangerous trading strategy. Remember that short-term gains on any stock are subject to taxation! (35%) See: https://www.yahoo.com/money/tax-implications-for-stock-surges-193626195.html Also see: https://www.cnn.com/2021/01/30/business/gamestop-reddit-rebellion-explained/index.html You must be thoroughly versed in short-term trading and the risks and pitfalls too.
Be sure to do your homework, Google and research various articles on investing and economic events to increase your financial knowledge. One such economic article from noted Kiplinger may start you on your own path to investment concepts and strategies. https://www.kiplinger.com/investing/stocks/stocks-to-buy/601756/where-to-invest-in-2021 The venerable publication, The Economist, also publishes it's annual yearly predictions: https://www.economist.com/the-world-in-2021
NOTE: We do not recommend nor do we give any specific investment advice, the information mentioned above is for informational purposes only.
Your Estate planning
There comes a time when one must consider what will happen to their assets after they have passed away. Yet, one must also consider that anything can happen at any age to pass away so that creating a will is an important life task. In 2017, the AARP estimated that approximately 60% of seniors pass away without a will, leaving all their assets to escheat to the State in which they live. See: https://www.aarp.org/money/investing/info-2017/half-of-adults-do-not-have-wills.html
It is important that your financial assets be guarded by a will to pass them on to heirs and relatives. An Executor must be appointed and a living will can assist in seeing that your financial assets are guarded when or if you are unable to make decisions on your own while you are living. See: https://www.estateplanning.com/what-is-estate-planning
It does not need to be expensive, in fact one may create a well and an estate plan online. Or, an attorney may be chosen, costing more, to create and administer a will and estate. Either way, an Executor/Administrator must be named to carry out disposition of assets as you wish after you have passed on.
Don't leave it to fate or negligence, take a moment to create a simple will and/or estate plan, name an executor and name a beneficiary for your financial and other assets.
A recession looms on the horizon
After robust post-pandemic growth in the labor, economic, housing and consumer sectors the economy has heated up to the point where the Federal Reserve must step in to take action to cool the economy down - and it has, firmly. Taking a no holds barred stance, the Federal Reserve has aggressively raised interest rates and will continue to do so until prices of goods and services returns withi a normal range. Meanwhile, prices of goods and services, not the least of which is gasoline, have climbed to high levels not seen within years - in fact inflation is at its highest peak in 40 years.
Family wallets are stretched to make ends meet, $80 for a tank of gasoline is a norm, and there's no end in sight for food prices to come down. The retail sector is now experiencing and predicting less than satisfactory performance and Wall Street is pricing in a recession for 2023 (if not a bit sooner). The labor market will be affected as the economy slows as well as the balance sheets of employed and retired alike. In fact, the Social Security Cost of Living Adjustment for 2023 will be one of the largest ever seen.
What can one do? Well, the obvious is to tighten the purse strings and forego non-necessary expenditures. It is imperative one must take control of their finances now and not wait until it is too late after a health crisis or job loss. Prepare for a slowing economy.
See: https://www.nytimes.com/2022/09/14/business/social-security-cola-increase.html
