Why the Stock Market Isn’t Enough for Your Retirement: Here’s What You Should Do
Relying solely on the stock market for retirement might seem like the conventional route, but it’s increasingly clear that this approach may not offer the financial stability most retirees need. The stock market’s volatility and potential for losses—especially close to or during retirement—can be a serious risk for those who need consistent income. If you are approaching retirement and counting on your 401(k) or IRA to get you through, it’s time to reconsider how well-diversified your plan is.
The Problem with Relying Only on the Stock Market
The stock market can offer substantial growth, with an average annual return of around 10% historically, but it comes with significant risks, particularly during market downturns. For example, the 2008 financial crisis wiped out significant amounts of retirement savings for many, leaving those close to retirement scrambling for new solutions. Even recent market volatility, spurred by inflation and economic uncertainty, has shown that the market can experience steep declines at unpredictable times
The sequence of returns risk—when negative returns hit early in retirement—can severely impact the longevity of your savings. Even if you save diligently throughout your career, a poorly timed market crash can drastically shorten the life of your retirement funds
Agitating the Problem: What If Your Savings Aren’t Enough?
Many workers nearing retirement are finding that their 401(k)s and other stock-based retirement accounts may not be enough to sustain their lifestyle. As explained in Explaining Finance, about half of working-age households won’t be able to maintain their pre-retirement living standard solely based on their savings. This is a troubling reality for those who’ve relied entirely on market-based investments.
According to Kiplinger, retirement savings plans like 401(k)s often fall short, leaving retirees vulnerable to stock market swings. The fear of running out of money or living below your means in retirement is a legitimate concern for many.
The Solution: Diversify with Real Estate and P.M.L.
To avoid these risks, diversifying your portfolio beyond the stock market is essential. Real estate offers a more stable, tangible asset that can provide consistent income, even during market downturns. One excellent strategy to consider is Private Money Lending (P.M.L.). With P.M.L., you lend money secured by real estate and receive steady monthly payments through promissory notes. This allows you to generate passive income, backed by the security of a real asset.
Real estate also offers tax advantages. You can take advantage of deductions for mortgage interest, property depreciation, and more, as Investopedia explains. These tax benefits can enhance the overall return on your investment, making real estate a more reliable and lucrative option than volatile stocks.
Get the Free Report and Start Protecting Your Retirement
If you’re worried that your stock-heavy retirement plan won’t be enough, it’s time to take action. Download our FREE report, “5 Myths Slowing Your Retirement Growth,” and discover how real estate and Private Money Lending can help you build a more stable, diversified retirement strategy. Don’t wait—prices are rising, and your future security depends on making the right choices today!
Download now at: Free Report 5 Myths Slowing Your Retirement
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