Retirement Funds

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At the time of this writing, the stock market had regained about half of the losses. But did that alarming drop make you baby boomers wonder if you need to remain invested in the stock exchange?

If so, the brief answer is that it is dependent upon your age.

The great news: Younger baby boomers do not have reason to fret about the correction, says Kyle Woodley, senior investing editor in Bear in mind, that the 2008 stock market crash had a recovery period of six decades.

“If you are between 50 and 60, there is still time to recuperate,” Woodley says in a MarketWatch article, At What Age Should You Be Worried About a Stock Market Downturn? You are not investing for another 5 or 10 years, you are investing for another 20. You’ve got room to grow your nest egg and take part in that growth. Half a century ago, you’d have been in two-thirds bonds in your 50s. That’s not true anymore.”

“If you’re saving for retirement or a different goal that’s 10 or more years away in the long run, you should be glad stock prices are down,” she says. “When stock prices are reduced, your money buys more shares. Then you have more stocks for when stock prices ”

1 rule of thumb for your retirement money you may consider is to maintain your era in safe investments, ” she adds. “So if you’re 60 you may have as much as 60 percent in CDs or short-term Treasuries, and the remainder can stick with stocks.”

Bear in mind, because the market has jumped the past eight decades, you might want to reevaluate your retirement portfolio to make sure your investments are aligned with your risk tolerance. Otherwise, you can lose far more money if the market crashes.

What if you are older and intend to retire in the next five years – or maybe you’re already retired and drawing out of your retirement funds?

Some older boomers could have more reason to worry: Jared Snider, senior wealth advisor at Exencial Wealth Advisors in Oklahoma City, says your risk is dependent upon how well you’ve prepared for a recession. “Those folks who haven’t prepared are impacted by it. It may do irreparable harm.

Experts generally agree that you shouldn’t invest anything you will need over the next five decades. This way you’ll avoid pulling out all your money in a market downturn which historically has always return up again.

“If the market crashes, then you ought to have the ability to ride out the storm instead of promoting everything in a panic,” writes Katie Brockman at a CNN Money article, How to Protect Your Retirement Savings from a Crash. “By investing money you know you won’t need for at least five decades, it is going to be easier for you to leave those savings untouched until the market recovers.”

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