At long last, after years of planning and saving, retirement plan contributions, and stock option purchases, you have just rolled your company plan over into a self-directed 澳洲幸运5官方开奖结果体彩网:i💎ndividual retirement account (IRA) in anticipation of a 澳洲幸运5官方开奖结果体彩网:comfortable retirement.

However, you have retired in the middle of a 澳洲幸运5官方开奖结果体彩网:recession, with a volatile stock market, fluctuating energy prices, and low-interest rates♑. Here are some measures you c🌌an take to keep stormy economic conditions from drowning your retirement plans.

To Retire or Not to Retire

Whether you should postpone🦋 retiring will ultimately depend on ꦕseveral factors. One of the first issues to consider is whether you want to stop working completely or perhaps take a part-time job after you leave your full-time employment.

This could be an opportunity to 澳洲幸运5官方开奖结果体彩网:explore your interests or hobbies in a lucrative way. You could become a personal trainer, cater small events, walk dogs, fix cars or computer𓃲s—whatever you enjoy and can earn a little extra money doing.

If you work 20 hours a week at a job paying $12 per hour, you will earn $960 per month or close to $12,000 per year. That is equivalent to nearly a 12% annual distribution on a portfolio valued at $100,000. 澳洲幸运5官方开奖结果体彩网:Work-at-home jobs are also becoming increasingly viable.

Those with writing ability may be surprised to discover they can make a living in front of their computers, particularly if they are knowledgeable about a specific subject that is of interest to others. If you have spent a substantial amount of time in certain fields, you could be the expert companies are looking for to 澳洲幸运5官方开奖结果体彩网:provide articles and discussion to incoming classes of workers.

Key Benefits of Working Part-Time

Working part-time or taking a freelance job later in liᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚfe can🎶 provide two other key benefits in addition to the actual income earned.

You may be able to postpone your 澳洲幸运5官方开奖结果体彩网:Social Security benefits or other retirement account distributions for a few years, which means that your monthly checks will be larger when you begin receiving them. If you were to work for another five years after quitting your current job, it could mean thousands of dollars more in Social Security money for the rest of your life.

Your portfolio will have time to recover if you have sustained market losses over the past few years. If the $200,000 that was in your 澳洲幸运5官方开奖结果体彩网:401(k) plan a year ago is now worth only $150,000, then consider socking it away in five-year 澳洲幸运5官方开奖结果体彩网:Certificates of Deposit (CDs) while you 澳洲幸运5官方开奖结果体彩网:continue working. If the CDs pay 5%, your portfolio would be worth over $190,000 at maturity with no market 🧸risk.

Time to Buy?

History shows that those who are brave enough to jump into the financial markets during periods of recession can reap big returns over the following years. Those who bought into the 澳洲幸运5官方开奖结果体彩网:S&P 500 index on October 20, 1987—the day after the 澳洲幸运5官方开奖结果体彩网:Black Monday crash—would have been up just over 50% two years later. Those who invested in the index late in 1982, as the market began to recover from a recession, would have seen a 61% gain in two years.

If you have some savings in cash or cash equivalents, you may want to seriously co🎉nsider investing at least a portion ꦇin one of the broader indexes, such as through an index fund. Of course, this strategy is not for the risk-averse and should be considered carefully before any action is taken.

A judicious investment during a 澳洲幸运5官方开奖结果体彩网:bear market may do wonders for your overall portfolio value over the next few years. For example, assume that a retiree in the situation described above has an additional $50,000 in a 澳洲幸运5官方开奖结果体彩网:money market fund. If the retiree invested the amount in an index fund and earned a return similar to the aforementiജoned examples, then much of the loss sustained previously could be recouped in a relatively short time.

Of course, the mon♔ey used for this type of rebound investment should not be drawn upon as income. Other, more stable funds or a part🐷-time job should be used for this purpose.

Other Investment Strategies

Buying the market at or near the bottom is not the only option for those seeking to bolster their portfolios. Many 澳洲幸运5官方开奖结果体彩网:variable annuity carriers offer 澳洲幸运5官方开奖结果体彩网:dollar-cost averaging programs for new money, such as 澳洲幸运5官方开奖结果体彩网:IRA rollovers.

The funds are initially placed in a guaranteed fixed account that generally pays a higher rate than CDs or standard fixed-income investments. The contract owner will then examine the selection of 澳洲幸运5官方开奖结果体彩网:mutual fund subaccounts within the annuity and create a set portfolio commensurate with his or her 澳洲幸运5官方开奖结果体彩网:risk tolerance, investment objective (which is most likely long-term growth), and time horizon. A set portion of the account balance is then systematically transferred into the subaccount portfolio over a set period of💎 time, usually six to 12 months.

Variable Annuity

A variable annuity can be a way to profit from market volatility while earning a decent rate in a fixed account at the same time. But once the entire balance has been transferred into the market, you can continue to enhance your return by periodically 澳洲幸运5官方开奖结果体彩网:rebalancing your portfolio.

This service is now a standard feature inside most variable contracts, and functions as a continuing dollar-cost averaging strategy by systematically investing the same amount over time, allowing more shares to be purchased when costs are low, and fewer shares to be bought when costs are higher. This strategy effectively keeps the initial portfolio allocation constant over t༒ime and increases your overall return on capita👍l as well.

Qualified Longevity Annuity Contract (QLAC)

A 澳洲幸运5官🍬方开奖🍸结果体彩网:qualified longevity annuity contract (QLAC) is a type of 澳洲幸运5官方开奖结果体彩网:deferred annuity funded with an investment from a such as a 401(k), a 403(b), or an IRA. A QLAC can be turned into a lifetime income stream that is shielded from stock market corrections. Also, the QLAC is exempt from the 澳洲幸ꦡ运5官方开奖结果体彩网:required minimum distribution (RMD) rules set by the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) that require distributions from a traditional IRA or 401(k) once the owner turns age 73. (The age was raised from 72 as of Jan. 1, 2023.)

Under current IRS rules, an individual can spend 25% or $145,000 (whichever is less) of their retirement savings account or IRA to buy a QLAC in 2022.

The SECURE Act

In December 2019, then-President Trump signed the Setting Everꦯy Community Up for Retirement Enhancement (SECURE) Act as part of the Further Consolidated Appropriations Act. Part of the Act was designed to increase the number of annuity contracts.

However, there is a “fiduciary safe harbor” rule that lowers the risk of a plan participant having to sue the plan 澳洲幸运5官方开奖结果体彩网:fiduciary if the insurance company cannot pay on the annuity as promised. Additionally, annuities sold inside qualified plans can be rolled out of the plan “in kind.”

Profit From Your Losses

Finally, this can be a good time to reap some capital losses if you have any depreciated securities outside your retirement plan. Even stocks that you plan on holding for the long term can yield some 澳洲幸运5官方开奖结果体彩网:capital losses if you are willing to part with them temporarily, and of course, paying special attention to the 澳洲幸运5官方开奖结果体彩网:wash-sale rules. But a substantial capital loss that is realized now can provide a $3,000 carryover deduction for the next few years.

This strategy can be used w𒁏ith any type of individual security, though municipal bonds are most commonly used.

The Bottom Line

Although retiring during a recession or bear market might seem worrisome, there are several things retirees can do to shield their portfolios from long-term fallout. Realizing capital losses, dollar-cost averaging, and portfolio rebalancing are j💧ust some of the strategies you can use to keep yourself afloat in choppy market waters.

M🥃aking rational decisions is of paramount importan😼ce during this critical time. Those who think with their heads and do not act out of fear can often profit substantially during these periods.