The month of August 2015 was a true roller coaster for investors in the stock market, with more valleys than peaks during the ride. The group of investors least thrilled by the turmoil, however, was seniors who have retired and are now living on fixed incomes from Social Security, a pension or other investments.
As we transition from a lifetime of employment and building our savings into the twilight years when we begin spending our capital for retirement needs, a profound emotional change occurs. Your spending “wants” become your spending “needs” and your tendency to shrug off market gyrations as inevitable cycles pivots to a more serious level of real concern about the value of our investments. This psychological shift for seniors creates stress, uncertainty and, in some cases, even fear.
Here is the problem: when stock markets undergo inevitable corrections or even extended downturns, many individuals panic and sell their investments at prices that are at deep discounts to reasonable valuations. These panic sell moves are especially harmful to seniors as they lock-in losses on those assets. The key is to remain calm during these periods of stock market turmoil and avoid the self-inflicted wounds that come from bad investment decisions.
However, if we examine the makeup of your investments, nearly every asset class has potential for some market volatility – except one. Your life insurance policy.
If you’re over the age of 70 and have a life insurance policy you no longer need, want or can afford, that life insurance policy may be a safety net during volatile times. It may be the extra resource that gives you peace of mind that can be tapped when and if it’s ever needed. It may also eliminate the strains of an added expense of annual premiums at a time when reducing unnecessary cash outflows.
Few seniors are aware their life insurance policy may be a source of stable retirement funds. If you don’t know about a life settlement, explore this website for information that might be helpful. Then, if a life settlement sounds like it might be a good option for you, explore the member information directory to find someone with whom you might work to meet your needs.
Selling a policy that is no longer needed can provide a “nest egg” that will be there when the rest of the world is seemingly out of control.