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Retirees can strategize for negative market conditions that may threaten retirement 2010-05-20 Retirees who plan for the changing economy will be in a better position to make their retirement income last, financial planner Brandt McDonald told NBC affiliate WSFA, an Alabama news station. According to McDonald, retirees may see higher taxes, interest rates and inflation in the future. Retirees can combat higher taxes by investing in an IRA, which allows them to withdraw their income tax-free, McDonald told the news station. "For some people, it may be better to go ahead and pay the tax on their IRA today while their investments and their tax rate are at their low point, so when the accounts do recover down the road, they're able to pull those investments out tax free in a much higher tax rate environment," he told WSFA. Investing in diverse mutual funds may protect retirees from inflation, while allowing them to participate in the stock market, McDonald explained to the news station. Retirees may take advantage of higher interest rates by investing in short-term certificates of deposit, which allow them the flexibility to change strategies as interest rates shift, McDonald told the station. Retirees who are anxious about how market conditions may affect their retirement should consider consulting a financial planner.  |
