Whether you’re planning to retire before the end of the year or you’re worried about how the looming recession might affect your retirement in the coming year, don’t panic. While you don’t necessarily have to worry about being laid off, there might be some concerning moments regarding your involvement in the stock market. Even though a recession is going to be a bit unnerving, as long as you have a good financial plan, you can avoid some of the stress.
As a country, we’re no strangers to recession. We even had one in the early months of 2020, but it didn’t get much media coverage since we were dealing with more pressing issues. However, the two-month-long recession was the most serious since the Great Depression. In those two short months, the GDP fell 19.2 percent, and unemployment shot to nearly 15 percent.
So, what causes a recession? A recession occurs when the demand for goods surpasses a country’s ability to produce them. This snowballs into high prices for goods (that pesky supply and demand), which means businesses have to spend more, reducing earnings and might result in lay-offs or a cut in employee pay. Suddenly employees aren’t making enough to cover rising costs, and, well, we’re familiar with the rest.
If you’re retiring, this snowball effect of economic uncertainty and chaos can be concerning. However, a recession during your season of retirement doesn’t have to mean doom and gloom for your financial portfolio.
If you’re about to retire or it’s in the near-ish future, there are some things you can do to protect your assets to reduce personal economic hardship, even if a recession occurs. Here are some ways you should prepare:
If you’re wondering whether or not you need to start preparing your assets for a potential recession, NY Elder Law Group can help. It’s always better to have your estate and financial documents professionally drafted and organized, especially as we enter an uncertain economic climate.
Visit our website or contact us at (718) 740-3300 to schedule a free consultation with our New York estate planning team.