3 Retirement Plan To-Do's During Summer Market Doldrums

June 29, 2021

We are in a summer downturn. it is what it is. Not much is happening in the market right now.

Even fat cats in the enterprise and Wall Street masters in space sometimes take vacations. And business activities are slow during the summer. One central question dominated the market: when Federal Reserve Will you eventually raise interest rates and reduce bond purchases? But for months, there is no definitive answer (2023 is the latest forecast for interest rates).

It’s okay if the market is a little depressed.In fact, it Wow.. It gives us time to take a step back and see the big picture.

Traders like my colleague Adam O’Dell use this time to build and improve their trading systems. Long-term investors like Warren Buffett use it to read and think. And people like you and me can use it to review our portfolio and overall retirement savings plans. Without the dull roar of the news cycle, we can go back a bit and look at our portfolio with a fresh eye.

Now, let’s implement the “Summer Slump Retirement Plan”.

Severance Plan Step 1: Prioritize new savings

This is a top priority as it can have a significant impact on both tax claims and the speed at which savings accumulate.

That first $ 1 new savings should most likely go to your 401 (k) plan. Say “almost” because there are reasons why you don’t want to invest in a 401 (k), such as an immediate liquidity need. If you may need money in the short term, it doesn’t make sense to lock it and risk paying taxes and fines on your withdrawals.

But if you’re comfortable trapping for a while for money, the 401 (k) is the only destination that makes sense for its first $ 1 savings. If your employer matches you dollars to dollars, and many do so, you will instantly earn 100% on your investment on the day you contribute.

My rule of thumb is that you need to get the most out of your 401 (k) before considering anything else. In 2021, you can donate $ 19,500 to your 401 (k) plan and $ 25,000 if you’re over 50. And that’s before matching. If you earn $ 100,000 and your employer offers a 4% match, it will add an additional $ 4,000 to your account.

And of course, all of this is tax exempt. Again, the priority of savings is always to maximize your 401 (k) first. Everything else in your retirement plan comes next.

Step 2: Make allocation tax efficient

I was able to write a book on asset allocation … and many people have it. But this can be kept simple.

We know that certain investment and trading strategies are more tax efficient than other strategies. Buy-and-hold positions in S & P 500 index funds generate virtually no taxable income until they are sold. Therefore, if you have a limited IRA and 401 (k) fund, you can store it in a taxable account.

But a bond? Bonds are one of the least tax-effective investments ever made. Since interest on bonds is taxed at marginal tax rates, it makes sense around the world to store bonds in tax-exempt retirement accounts. The same applies to short-term trading strategies, as well as collectibles and precious metals. All of these are very tax exempt, so it’s easy to keep them in a tax exempt account.

Severance pay plan Step 3: Pruning a little

Not all stocks you choose will be the winner, and not all trading strategies will work as planned. That’s good. Your portfolio is like a tree. In most cases, it can be left alone to grow. But sometimes pruning it keeps it healthy. You want to grow stronger branches, so it’s best to cut off unhealthy branches to give them more room.

Use this time to improve the look of your portfolio. If you have stocks or strategies that aren’t working as planned, it may be a good time to loosen them and look for new ones.

And of course we can help with that!

If you want to know more about Adam’s most confident stock recommendations, when to get in and out of these investments, and guidance on how he can “buy high … sell high” using momentum principles, Click here for details Green Zone Fortune And Adam’s Millionaire Master Class..

For safe benefit

Charles Size More

Editor, Green Zone Fortune

Charles Size More Is the editor of Green Zone Fortune Specializes in income and retirement topics.Charles is a regular Bull & Bear Podcast.. He is also a frequent guest on CNBC, Bloomberg and Fox Business.

3 Retirement Plan To-Do’s During Summer Market Doldrums Source link 3 Retirement Plan To-Do’s During Summer Market Doldrums