Your Retirement Plan
Building a Resilient Retirement
Every few months, the Federal Reserve Board (FRB) conducts stress tests to measure the resiliency of the nation’s large banks. If the economic you-know-what hits the fan and a recession occurs, are those banks able to keep lending to households and businesses? Do they have what it takes to withstand a significant, prolonged economic downturn? Stress tests are an important exercise, to say the least. This is especially true at a time when the global economy was first ravaged simultaneously by a pandemic and an economic meltdown of historic proportions just a few short months ago.
If the FRB deems it necessary to conduct routine stress tests on the large banks that keep the U.S. economy afloat and moving forward, it makes a whole lot of sense to help ensure the viability of your retirement plan during tough times by putting it through a few “stress tests” of its own. What if the federal government fails to prevent Social Security from going belly up at some point down the road? Would your investment portfolio be able to absorb the effects of a market crash? Are you in a solid position to deal with the costs of long-term care? The purpose of this month’s guide is to explore these and other scenarios and provide you with some ways to establish a game plan to help tackle problems that could trip up your retirement plan in the future.