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When a world event such as the Iran War shakes the stock market, it can be difficult for retirees to take a breath and figure out whether they need to take action with their own investments.
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That’s why GOBankingRates talked to several personal finance pros for their best advice. Spoiler alert: All of them said that avoiding panicking is a good first step.
Examine Ways To Lower Your Risk
“If you’re very sensitive to the volatility that has come from the war and the unknowns of if and when the war will end, then maybe shifting assets to lower risk makes sense,” said Brandon Gregg, CFP, advisor with BBK Wealth Management
Along with lowering the risk in your portfolio, Marcus Sturdivant Sr., managing member of The ABC Squared, said a move to income-producing investments may be a good decision. “Even in retirement, low-cost ETFs or index funds are a good way to have some skin in the game,” he said.
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Don’t Rush Into Quick Decisions
It’s also important for retirees to not make any hasty decisions when it comes to their investments.
“For someone who’s already retired and drawing on their savings, the concern is a little different than it is for younger investors,” said Taylor Kovar, CFP, co-founder of UseKlear.com (previously BudgetGPT). “They don’t always have the runway to wait out a long recovery if they make a big move at the wrong time. So just being thoughtful and not rushing into anything tends to serve people better than trying to outmaneuver what’s happening.”
Consider Keeping Additional Cash Outside of Investments
According to several of the money experts who talked to GOBankingRates, perhaps now is a time for retirees to look at how much money they have put away outside of their investments.
“Having some cash set aside outside of investments is something that tends to give retirees a little breathing room,” Kovar said. “If there’s already a cushion there, it may mean they don’t have to touch anything in the portfolio while things are uncertain.”
Lock In Some Gains
If you have weathered the storm and need some cash, lock in some of the gains from this recent rally, according to Sturdivant. “Not all, but trimming some of your winners and guaranteeing profit is rarely a bad move,” he said.
As you take some gains, consider rebalancing within your IRA to not incur tax consequences, said Marguerita Cheng, CFP, CEO of Blue Ocean Global Wealth. She and the other money experts who talked to GOBankingRates said one easy way to begin adjusting your investments amid the war is to check in with your financial advisor.
Editor’s note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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This article originally appeared on GOBankingRates.com: 4 Ways Retirees Should Adjust Their Investments Amid the Iran War