Economic uncertainties are nothing new, but that doesn't mean you shouldn't consider fresh approaches to your retirement plan. According to Laura Corbiani, CFP®, Founder & Lead Financial Planner, Astraea Wealth Management, LLC, we can never truly know what the future markets will hold, much like life itself.
"Currently, major concerns are inflation, interest rate changes, and potential policy shifts from a new administration," Corbiani said, sharing tips for navigating potential market volatility. "Ensure your investments are appropriately balanced between high-risk and low-risk assets based on your timeline and financial hopes and dreams. An advisor can help explain your investment strategy and suggest adjustments if needed."
So what does a flexible retirement plan actually look like in practice? Corbiani explains that it's all about being prepared and adaptable, and could include all or some of the following:
Having an income map. "This is a detailed outline showing exactly where your living expenses will come from for at least the next one to two years, but ideally for the next five or more. This map is your baseline, much like a GPS route that you can adjust when unexpected detours arise."
Understanding the difference between your essential expenses and your wants. "In challenging years, you can trim some discretionary spending without significantly impacting your quality of life."
Adjusting your spending based on market conditions and your retirement phase. "If the markets are down, it might be wise to tighten the belt a bit, spending less during tough years to avoid depleting your portfolio too quickly. This approach is often referred to as the 'guardrails' strategy."
Having multiple income streams can provide a financial cushion. "These could include Social Security, a pension, rental income or even part-time work. Diversifying your income sources helps you weather financial storms more effectively."
If the markets take a downturn, consider working a bit longer. "This doesn't mean staying in a job you dislike; perhaps you can find part-time work that's both stimulating and financially beneficial. It's a great way to stay active and engaged while boosting your income."
Knowing your emotional trip-ups. "If you hear the news that the markets are down, do you go into a fear spiral? If that's the case, writing a letter to your future self on why you're taking the investment risks you are can help you stay the course (and remind you why you're doing this) when your anxiety steps in."
Regular check-ins with your financial planner help, too. "They can help you adjust your plan based on your concerns, life changes and current market conditions. They are like a co-pilot to help navigate your financial journey."
While there are always different pros and cons to every option (and every individual's situation varies), Corbiani notes several financial instruments that could offer stability during times of economic uncertainty, such as: high-quality bonds; cash equivalents (like CD's, money markets and savings accounts); annuities and cash value life insurance; and more.
Ultimately, Corbiani emphasizes that it's perfectly normal to acknowledge the uncertainty and anxiety investments in your retirement can cause.
"It's just your life savings we're talking about—no big deal, right? Of course it's a big deal!" she said. "Knowledge is power, and small steps to helping learn more about your financial situation and the investments available to you will make a huge difference in your long-term financial well-being.
"As women, we typically want to know all of the answers before taking a step forward (like how we wait until we're 100% qualified to apply for a promotion), but I'll encourage you to celebrate exactly where you are now and know you can make great steps forward in your financial picture no matter where you're starting!"
Written by Sarah Suydam, Managing Editor for West Michigan Woman.
This article originally appeared in the Feb/Mar '25 issue of West Michigan Woman.
Disclosure: Investment advisory services offered through Equita Financial Network, Inc. an investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. Equita Financial Network also markets investment advisory services under the name, Astraea Wealth Management LLC. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. Investing in securities involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.
