Cooperative Living July 2020 - 18

YourBusiness | Story courtesy of StatePoint Media
What a Recession
Means for You
Six ways to protect your
financial future
F
inancial experts agree
that no one is completely
immune from risk when
a recession occurs, and that an
economic downturn can have
a significant impact on your
personal and financial situation.
However, they also agree
that it is important to avoid
panicking and to remain focused
on your long-term financial
plans and strategies.
When thinking about what
a recession means for you
and your future, here are
six things to consider:
1.
Think about how a recession could affect your retirement
plan and whether your savings and investments need to
be adjusted. Does your financial strategy appropriately
take into account your age, risk tolerance, target
retirement timeline and desired lifestyle post-retirement?
If you are close to retiring, you may want to make
$
more conservative investments ahead of a recession.
Younger investors may be better positioned to maintain
a higher-risk portfolio through a downturn and may
even have opportunities to buy up more securities while
prices are low.
2.
3.
Take time to evaluate your entire investment portfolio,
rebalancing it as necessary to minimize risk in your asset
allocation while keeping your long-term goals in mind.
You might also consider loss harvesting in taxable
accounts to take advantage of potential tax savings or
boost your tax refund.
Closely review your budget and cash flow, with an eye
toward identifying any expenses or other spending that
can be proactively trimmed to free up money now, or
that can be cut in the future if you feel a financial pinch.
Consider holding off on major purchases or delaying travel
until the market improves. You may even want to redirect
some of your savings, perhaps your monthly contribution
to a child's college fund, to boost your cash reserves.
16 | Cooperative Living | July 2020
Recessionary times call for
a full financial review.
4.
5.
6.
Think about upcoming changes in your personal life,
planned or otherwise. Are you having a baby? Sending
a child off to college? Do you or a family member have
any health concerns that may require additional care?
Consider how these developments could impact your
finances and the risks they might introduce.
Similarly, take stock of your professional situation. Your
job likely provides your biggest source of income. If you
are not sure that your job would be secure in the event
of a recession, update your resume and think about where
and how you might begin to search for a new one if you
are laid off.
A Certified Financial Planner professional can help
you evaluate the current state of your finances, understand
the potential impact of a recession and devise a course
of action that keeps you on track to achieve your
goals. To find a CFP professional near you, visit
letsmakeaplan.org. Talking to a financial advisor
now is a smart investment in protecting your future.
With a recession officially upon us, don't wait to
make a plan. By taking proactive steps now, you can better
safeguard you and your family's financial future. ■
To find a CFP professional near you, visit letsmakeaplan.org.
co-opliving.com
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Cooperative Living July 2020

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