When facing investment losses and uncertainty about retirement options, it’s essential to consider the long-term goals and timeline. The typical strategy of keeping a portion of retirement savings in stocks despite occasional downturns is intended to beat inflation. Moving money to safer investments may result in losses after factoring in inflation and taxes. Selling during market downturns could also lock in losses and prevent participation in the market rebounds.
For retirement planning, it’s crucial to weigh the effects of inflation and taxes on investments and the potential need for funds within five years. The article also addresses a reader’s inquiry about Social Security benefits for retired public employees and the changes in the Windfall Elimination Provision and the Government Pension Offset.
The Social Security Fairness Act has eliminated these two provisions, potentially allowing for increased benefits and retroactive payments. Spouses of public employees who receive non-Social Security pensions may also be impacted by the changes. Understanding the complex rules surrounding Social Security benefits is important for maximizing benefits, and consulting a financial planner may provide guidance on the best claiming strategies.
In summary, the article advises considering long-term investment goals and retirement needs when navigating market volatility. The changes in Social Security provisions can affect retirement benefits for specific groups, and it’s crucial to stay informed and explore options for optimizing retirement income.
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