Aside from the temporary crash at the start of the pandemic back in 2020, the Stock Market has experienced a prosperous 2 years, but as 2022 came around the corner, things weren’t looking up.
With stock values down by a drastic amount, everyone, ranging from soon-to-be retirees to big-time investors, is feeling the pressure, and if you were planning on retiring this year, you’ll know this feeling all too well yourself.
With this in mind, should you even follow up on your plans to retire this year? Or should you postpone it indefinitely until the market cools down?
The first thing you should check is how your portfolio is doing, because it’s completely uncertain when stocks may spring back to their higher values, and these delays could impact your retirement plans immensely.
If you were planning on retiring next month, and things continue at this pace, you’ll be best off reconsidering, especially if a large portion of your portfolio is way down, which is highly likely.
The best thing you could do is shift toward more conservative assets like bonds, which are infinitely less volatile than stocks, with the catch being that the returns are just that much lower.
Reassess your circumstances
Secondly, you could possibly retire even without tapping into your retirement portfolio if you’ve got some form of stable income, like a small side business, an equity loan, or an income property, which significantly helps with the continuation of your retirement plans.
However, if your portfolio was your main source of income, and is what you relied on for your retirement, you may want to do a damage report on it before proceeding with your retirement.
The stock market could bounce back at any time, and if you lock in your losses right now, you’ll practically throw away all of the years u spent working on your investment portfolio.
Finally, you have to consider whether you’re even able to work at your job anymore if retiring this year is no longer an option because additional years of a job that makes you miserable will have a negative impact on your productivity and your psyche.
Things are uncertain, and the stock market could easily recover in the next few weeks, but this doesn’t mean that things can’t get worse either, so continue plugging away at your job for the time being if you’re able to, in order to face the stock market crash head-on.
Flexibility is key, and your plans to retire this year aren’t set in stone, so don’t think of them that way either, because things go wrong all the time, and the better prepared you are next time, the easier it will get.
Ultimately, it’s up to you to decide whether or not you should retire this year, but make sure that whatever decision you take is something your future self won’t regret. Good luck!