Rescue your Retirement Plan
There is a reason to expect that when the stock market does start to rise again the gains could be significant. Previous bear markets have yielded some great opportunities for those with the ability to remain invested, and the first years of the bull markets that followed tended to provide much higher than average returns. While the past is never a guarantee of the future, the history of previous bear markets certainly provides some reason to hope that the next move up will be significant. Younger workers have time on their side, and they are able to ride out these temporary storms.
No matter what their age, however, it is a good idea for workers to take stock of their retirement savings and make a few adjustments. Periods of weakness in the stock market can cause retirement portfolios to become dangerously unbalanced, and it is important for each worker to take a look at his or her asset allocation to make sure it is appropriate.
Keep an Eye on Your Asset Allocation
The carnage in the stock market may have caused the balance between equities and fixed income investments to become off balance. It is important for each worker to take a look at the ratio between stocks, bonds and other investments and determine whether or not it is still appropriate. A number of factors help determine the correct asset allocation between equities and fixed income investments, so this process may take some time. Among the factors to consider are age, number of years to retirement, current savings, any pension plans and expected living expenses in retirement. There are a number of free online tools designed to make asset allocation easier, and many brokerage firms may provide help for their customers as well.
