Re-establishing your goals during recovery

The Great Recession has been called the worst bear market since the Great Depression. Many investors have seen their retirement account balances decline by 30 percent or more.

That said, the most productive step you can take as an investor during this economic recovery is to regain control of your financial future. Especially in the aftermath of significant portfolio losses, it’s important to consider these basic strategies to put you back on track with your retirement goals.

Manage spending – Although it might be a sobering experience, take a real assessment of your spending habits and reset your expectations for spending in retirement. Reduced spending might have more of an impact on your retirement than you think. According to a report from Americans for Secure Retirement, if Boomers maintain their current standard of living and don’t cut costs, three out of five will outlive their financial assets in retirement. If reduced spending is challenging, consider working with a credit counseling agency to help improve chances of reaching your goals.
Postpone retirement – For many, the thought of postponing retirement seems more like a nightmare than a solution. But consider how delaying retirement a few years might positively affect your retirement-income goals. A recent study by Financial Engines suggests delaying retirement by 2 to 3 years can get near retirees on track without any increase in annual savings. According to the same report, “Delaying retirement is more effective than commonly realized, because it compounds several factors: allowing more years of savings, giving savings more time to grow, decreasing the number of years of retirement spending that need to be funded, and increasing Social Security benefits.”
Seek advice – If you’re like most people, you don’t have time to constantly monitor holdings, evaluate portfolios and regularly rebalance your investments to keep them in line with your risk tolerance and investment objectives. Consider working with a financial professional. They may help to add focus in pursuit of your financial goals. An experienced financial planner can aid in helping make informed decisions about your portfolio. Planning carefully, investing wisely and spending thoughtfully will help increase the likelihood that you get back on track to a financially secure retirement.

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