Article

Finding Relief in Times of Financial Stress

Financial stress is a common experience, especially in retirement when your income is often fixed and your reliance on savings and investments is higher than ever. Managing financial stress is not about avoiding stress altogether but about knowing where to turn when it arises.

November 5, 2024
Important Disclosure: Content on our website and in our newsletters is for informational purposes only. The information provided may (or may not) directly apply to your situation. We recommend that readers work directly with a professional advisor when making decisions in the context of their specific situation.

Whether market turbulence causes your blood pressure to spike or you manage to stay calm, it's important to recognize that almost no one is immune to financial stress all of the time. Stress can arise not just from economic news but also from personal events like job loss, natural disasters, and other unexpected life changes.

Financial stress is a common experience, especially in retirement, when your income is often fixed and your reliance on savings and investments is higher than ever. The sight of your portfolio losing value can trigger anxiety and fear about your long-term financial security. However, it’s essential to approach these situations with a clear head and a strategy in place.

When financial stress strikes, the first step is to take a moment to assess your situation. It's easy to let emotions take over, but understanding the actual impact of market movements on your long-term financial goals is crucial. A 3% drop in the S&P 500, while significant, may not have as devastating an impact on a well-diversified portfolio as it seems at first glance. Remember that markets have a history of recovery, and long-term investments are built to withstand these kinds of fluctuations.

Having a Sound Plan

Staying informed is important, but it’s equally important to avoid making hasty decisions based on short-term market movements. Panic selling during a market dip can lock in losses that would otherwise have been temporary. Instead of reacting impulsively, revisit your financial plan to ensure it still aligns with your goals. If your plan is sound and has accounted for potential market downturns, it will provide a roadmap to help you navigate these challenging times.

Consulting your financial advisor can provide reassurance and guidance. An advisor can help you understand how market changes impact your portfolio and whether any adjustments are needed. Often, simply talking through your concerns with a professional can reduce anxiety and provide a clearer perspective on your financial situation.

In times of financial stress, it's also important to consider your liquidity. Having an emergency fund can offer a cushion against unexpected expenses or market downturns, providing peace of mind that you have immediate resources available if needed. Reviewing the accessibility and adequacy of your emergency fund can be a helpful exercise during uncertain times.

It's Who You Know

Financial stress is not just about numbers; it can take a toll on your emotional and mental well-being. Leaning on your support network – whether that’s family, friends, or a community group – can provide emotional relief. Sometimes, just sharing your concerns can make them feel more manageable.

Managing financial stress in retirement is not about avoiding stress altogether but about knowing where to turn when it arises. By staying informed without overreacting, reviewing your financial plan with a trusted advisor, ensuring you have a solid emergency fund, and seeking support from those around you, you can navigate financial stress with greater confidence.

In doing so, you’ll be better equipped to ensure that your retirement years remain focused on enjoyment and fulfillment, rather than on the inevitable bumps along the financial road.

Other content you may like

  • Podcast Highlight 1 - Market Recap

    Podcast Highlight 2 - Weighted S&P 500 and AI

    June 3, 2024
    Learn valuable information in this clip as the Strong Valley advisor team brings light to the S&P 500, tech stocks and how growth affects their market success.
    Read this Article
  • Inflation Varies According to Your Age & Spending

    Inflation Varies According to Your Age & Spending

    August 3, 2021
    What will inflation be in the coming years? The headline Consumer Price Index is important only as a general gauge. It may not accurately reflect your individual inflation rate. This article looks at some inflation components for you to consider, to get a better picture of your unique personal inflation rate based on your age and spending habits.
    Read this Article
  • April Student of the Market

    Stock Market History for Your Future

    April 27, 2022
    Do you feel your satisfaction level with the market is tracking with the norm? Maybe this brief history of long term stock performance might help change your mind. This month’s Student of the Market shows the numbers on how $1,000 invested in 1926 grew to over $14 million and how best days for stocks tend to closely follow the worst days.
    Read this Article
  • Financial Assets & Accounts

    How To Keep All Your Financial Accounts & Assets Neatly Organized

    January 22, 2021
    Don’t let disorganization become one of your biggest money problems.
    Read this Article
  • The link you have selected is located on another server. The linked site contains information that has been created, published, maintained, or otherwise posted by institutions or organizations independent of this organization. We do not endorse, approve, certify, or control any linked websites, their sponsors, or any of their policies, activities, products, or services. We do not assume responsibility for the accuracy, completeness, or timeliness of the information contained therein. Visitors to any linked websites should not use or rely on the information contained therein until they have consulted with an independent financial professional. Please click “Continue to Link” to leave this website and proceed to the selected site.
    phone-handset