It’s no secret that we’re knee-deep in one of the most severe recessions in several decades – and you need important investment advice to see you through the recession, particularly if you’re saving up for retirement.  Since more baby boomers than ever before are freezing contributions to their 401(k) retirement funds or cashing them out altogether, it’s time to dispense some investment advice that will recession-proof your retirement savings – and have you living the retirement plans that you’ve always dreamed of!

Investment firms and advisors are keen to let their golden-aged investors know this key piece of advice: whatever the condition of the recession, do not pull out of the market out of fear.  While every bone in your body might be telling you to pull your money out of your portfolio before you lose your life savings, take note: markets inevitably must go through a cyclical effect.  Sure, it’s tempting to invest during the good times – but what about when a bear market is in full effect?  Any investment advisor will tell you that it’s because many investors don’t have the patience or the stomach to watch as the markets fluctuate based on economic growth and recession.  In fact, a recent study by Dalbar, Inc. found that no matter what an investor’s desired retirement plans or investment timelines, that same investor ended up selling his or her shares within four to six years in the market, simply because they were frightened by a sudden downtown in the market and the economy.

So if you’re looking to recession-proof your retirement savings, it’s important to understand that you shouldn’t pull your money out of the markets simply because it’s doing poorly; rather, a savvy investor will understand that once a market reaches the bottom, it has nowhere to go but up. However, a smart investment advisor will do everything possible to make sure that their clients understand the nature of fluctuating markets: it’s an inevitability that markets will waffle between a bull and bear market. 

Additionally, make sure that you receive an investment education from your registered investment advisor.  He or she will help you to outlast the poorest of markets, so you’ll be able to reap the fruits of a bull market once again!

For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!

Authored by Ken Himmler, Sr.