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Retirees can overcome market volatility 2010-05-19 Older adults have seen a dramatic decline in their retirement savings since the subprime mortgage crisis hit. According to the Center for Economic and Policy Research, those between ages 46 and 54 have seen a 45 percent average decline of their retirement savings. Americans should establish a variety of income sources to withstand market volatility, Forbes recommends. Older Americans should create a separate emergency fund for unforeseen expenses, Forbes reports. Putting away two years of expenses should prevent pre-retirees from being forced to tap into retirement accounts and incurring early withdrawal penalties from the Internal Revenue Service, the magazine recommends. Pre-retirees can avoid succumbing to negative market conditions by diversifying their portfolios to include a mix of stocks, bonds and alternative investments, reports Forbes. By choosing a variety of investments, older adults may be able to better withstand downturns in some areas and profit off others. By establishing an emergency fund and growing their income during pre-retirement years, retirees can better protect their primary retirement investments, such as 401(k)s and Social Security benefits. Retirees can also utilize other sources of income that are not linked to the stock market, such as reverse mortgage loans and annuities.  |
