We are in a bear market at the moment. It’s hard to say for certain, but what usually comes next is a recession. Economists fear that it might be closer than we suspect. A 2022-2023 recession would be financially straining on a lot of people, but the silver lining is that it could also potentially get inflation under control. Seniors have already been dealing with financial hurdles since the pandemic began, and a recession would just be one more thing to have to deal with. CNCB’s Michelle Fox reports on how many consumers are worried about their financial futures, and ways to prepare for a potential recession ahead.
A Potential Recession
A recession would slow economic growth, and the despite the inflation and rising interest rates, our economy has been steadily rising. It’s created a vicious cycle that has fueled the inflation and interest rate battle. Even with the threat of a recession, the Fed is still committing to continue to raise interest rates. For seniors looking to prepare for the future economy, these steps can help:
Maintain your retirement investments, if possible. Withdrawing from them too early can be a huge tax liability. Also, any return on investment would be lost. Bull markets, the opposite of a bear market, can increase the return on a 401(k), if you let it be in times of uncertainty.
Reduce Expenses and Debt
Minimizing costs as best you can allow you to save more of your income. Debt, especially at a much higher interest, can make it difficult to maintain or grow your nest egg in retirement.
Build New Income Streams and Save
Seniors might consider earning extra revenue in retirement. Not necessarily go back to work, but finding a passion, hobby, or enterprise that can bring in a little extra income can certainly help. If they can earn more, they could potentially save more. For example, any benefits they receive could be used to more an emergency fund.
Seniors are resilient. If it’s been said once, it deserves to be said again. Inflation, interest hikes, and now maybe a recession haven’t been able to defeat us yet. That said it isn’t easy to stay ahead. Plan, get advice where you can find it, and adapt to every challenge that comes our way. If we do that, then we can make it through.
For more on retirement, Social Security, and all things seniors care about, follow along with the Council for Retirement Security. Also, help protect Social Security from a recession by joining in the Council’s fight to defend the Trust today.