How to protect your retirement savings from a crash. Unfortunately, those spectacular averages won't last forever, and the investment pros have some pretty pessimistic predictions for the future. Asset management company BlackRock, for example, claimed in its quarterly investment outlook report that U.S. stocks are expected to gain an annualized 5.9% over the next 10 years (compared to the estimated 12% return investors saw in 2016). While 56% of investors believe they'll have enough money to retire, 65% said they were unaware that expected returns are predicted to be far lower in the future than they've been in the past. So what can you do to protect your retirement savings in the event that the market crashes? You may need to rebalance your portfolio to ensure your investments are aligned with your risk tolerance, otherwise, you could stand to lose a lot of money if the market tanks. Don't invest anything you'll need within five years This has always been a good piece of advice for investors to avoid having to pull your money out of the market, but it's especially true during a market downturn. By only investing money that you know you won't need for at least five years, it will be easier for you to leave those savings untouched until the market recovers. This begs the question, though, of whether it's best to put that money you've saved toward your debt or into your savings fund. Again, the money you invest should be money that you won't need for at least five years, so it's wise to pay down as much debt as you can so you can be sure you won't need to pull that money out of the market if a financial problem pops up.
Do you remember what it’s like being a kid with no financial responsibilities? Neither do I. It seems like we have been adulting forever. If life insurance isn’t quintessential adulthood, I don’t know what is. As you are reading and researching life insurance, one of the biggest questions you ask yourself is “Do I even need life insurance?”
Ask yourself this question: Does someone rely on me financially? If the answer is yes, then you likely need life insurance. Let’s discuss a few different types of people and their need for life insurance.
Single? You probably don’t need it.
If you are single and have no children, you probably don’t need life insurance. However, if you’re an ultra-planner or want to have a family sooner rather than later, locking in those low rates while you’re young and healthy can be a wise move.
Here are a few situations in which buying life insurance would be recommended even if you’re single:
- Co-signed loans
Maybe your grandparents are co-signers on your private student loans or your parents co-signed on your mortgage. If you die before the balance is paid, the creditors can go after your co-signers. Life insurance can pay for these debts.
- Caring for relatives
If you are caring for siblings or aging relatives you should consider life insurance to ensure that your loved ones are still provided for even if you are no longer around.
Have dependent children? You definitely need it.
Those with children have the greatest need for life insurance. Children rely on you for food, clothing, shelter, medicine, and everything else. If you die, life insurance can continue to fund these things, and it can also pay for hopes and dreams such as college tuition or a wedding.
Let’s take a closer look at specific parental situations:
- Dual income families
If your household has two incomes contributing to standard of living, the sudden loss of a parent can cause financial upheaval if there is no life insurance to replace the lost income. One parent is now responsible to provide what two incomes previously did. For example, the proceeds from a life insurance policy can pay off the mortgage ensuring the children do not have to be uprooted from their home…