It may take years before the historic Brexit is finalized and we’re still not certain what the long-term impact may be. However what we are seeing in the short-term is the impact this has caused to the volatile markets. The most important thing you can do right now is to not overreact as this can cause major problems to your retirement nest egg.
If you’re within the five to seven year period before or after retirement, what’s happening with the markets now can dramatically alter the rest of your retirement years. One of the biggest mistakes people are making when markets are down like this, is they start taking withdraws out of their IRA, 401k, and other accounts because they’re afraid they won’t be getting a steady paycheck anymore. It’s called Reverse Dollar Cost Averaging.
The problem is this can erode at your principal much faster and increase the odds of running out of money even if the markets go back up which may cause you to have to work an extra five to ten years, or completely change your lifestyle.
Tuesday, July 5, 2016
Thrifty Thinking: Brexit and Your Portfolio
Joshua Mellberg, president and founder of J.D. Mellberg Financial (www.jdmellbergfinancial.com), is an Investment Advisory Representative and licensed insurance agent. He is a sought-after speaker on retirement income planning strategies and has been featured on CNBC, PBS and Yahoo! Finance. He says: