The Recession Conundrum for the Retirement Red Zone

The world is in a state of uncertainty and financial shock. The experts are confounded about what will happen, and companies can't forecast earnings for the next year. The stock market is down between 10% and 20%, depending on the day you check it. The value of the U.S. dollar is dropping as the world loses interest in U.S. assets. Trump is threatening to fire Fed Chief Jerome Powell if he doesn't lower interest rates. This is what we call chaos!

Tough time to staring down the final leg to retirement. The red zone of less than 5-10 years until retirement is the critical planning window when you want everything to go right. After a long hard career with a nest egg from your blood, sweat, and tears you want to ride into the sunset and relax and maybe start a new venture.

What if the world is upside down and in a financial downturn in your particular unlucky window?

What moves should you consider making that go against the pundits' mantras of never selling, staying invested, and riding it out?

What if the returns average under 3% in the stock market for the next 10 years, and your retirement projections are based on more than double that return?

The easy everything market is over! If we do have a recession, as the odds are increasingly predicting, it will pay to lay out a lot of different options to protect yourself from taking it on the chin at exactly the wrong time.

Fixed rates are still high on guaranteed investments like fixed-rate annuities. The bond markets have some nice income options in short-duration portfolios and dividend-paying stocks will serve your income needs better than the AI theme!

There are innovative retirement products that have income benefits that grow as high as 15% a year for those looking to build their own pension-like income stream for life.

Private equity and credit have options that are not correlated to the current stock and bond market and have low volatility for those looking to reduce overall risk.

It is a time to take action! If you do your own research, it is time to dig in and make your analysis. If you are looking of options and some education, reach out to me at john.lohrenz@lpl.com, and I am happy to see what I can do to guide you in the right direction.