Richard Hanson discusses overcoming fears of market volatility
Listen to the interview on the Business Innovators Radio Network: Interview with Richard Hanson President of Generations Wealth Management Discussing Overcoming Fears of Market Volatility – Business Innovators Radio Network
Market volatility refers to the fluctuations in the prices of financial assets, influenced by various factors such as economic conditions, political events, and investor sentiment. For individuals planning for retirement, grasping the concept of market volatility is crucial, particularly as they age and have less time to recover from potential downturns.
As Richard Hansen points out in the podcast, younger individuals, typically in their 20s and 30s, can afford to take on more risk in their investment portfolios. They have the advantage of time, allowing them to weather market downturns and benefit from long-term growth. Historically, over a 20-year period, even significant losses in a few years can be offset by gains in the remaining years, leading to a favorable overall return.
However, as individuals approach retirement age—often starting around 62 years old—their investment strategies need to shift. At this stage, the time horizon for recovering from market losses becomes shorter. For example, a 68-year-old may not have the same 20-year period to recover from a significant market downturn as a younger investor would. This necessitates a more conservative approach to investing, focusing on capital preservation and income generation rather than high-risk, high-reward equity positions.
Richard emphasizes the importance of customizing investment portfolios based on age and risk tolerance. For younger clients, a higher allocation to equities is appropriate, while older clients should gradually increase their holdings in more stable, income-generating assets such as bonds, annuities, and permanent life insurance. This shift helps mitigate the risks associated with market volatility.
Richard explained: “As a trusted family-owned firm, we blend our deep-rooted values of integrity, trust, and reliability with innovative financial expertise. With a commitment to excellence, we strive to be the beacon of financial stability for generations to come, fostering prosperity and peace of mind within the families we serve”
Annuities have gained popularity among older investors as a means to provide stability and guaranteed income. Richard notes that modern annuities can offer principal protection and the potential for growth linked to market performance without the risk of losing capital during downturns. This feature is particularly appealing to retirees who are concerned about outliving their savings or facing significant losses in their investment accounts.
A well-structured financial plan is essential for navigating market volatility. Richard discusses the need for a comprehensive approach that considers various factors, including risk tolerance, income needs, expenses, inflation, and tax implications. By understanding these elements, financial advisors can create a roadmap that helps clients achieve their retirement goals while minimizing the impact of market fluctuations.
As individuals reach retirement age, they must also consider required minimum distributions (RMDs) from their retirement accounts. Richard highlights that many retirees may not need these distributions for their living expenses, yet they are mandated by the government. If the market is down when RMDs are taken, retirees may be forced to withdraw funds at a loss, further complicating their financial situation. Therefore, planning for RMDs well in advance is crucial to avoid penalties and manage tax implications effectively.
In conclusion, understanding market volatility is a vital component of retirement planning, particularly as individuals age and have less time to recover from market downturns. By tailoring investment strategies to align with one’s age and risk tolerance, utilizing products like annuities for stability, and developing a comprehensive financial plan, retirees can navigate the uncertainties of the market with greater confidence and peace of mind.
About Richard Hanson
Two generations of trusted Hanson financial professionals serve multiple generations of clients concerned with financial goals, wealth management, safety, security, and estate planning. Richard Hanson, President of Generations Financial & Insurance Services, began his career in 1983. He is currently an educational speaker on retirement and money management. Mr. Hanson is Designated as a Certified Senior Advisor (CSA). He Currently Holds a membership with the National Association of Life Underwriters. 2011 Insurmark Hall of Fame Inductee. Andrew Hanson, Vice President of Generations Financial began his career in January 2016. He is the Head of Case Design Team & Digital Outreach. He hosts numerous Seminars educating our community on such subjects as; Social Security, RMD’s, Asset Protection, Legacy Protection, College Funding and IRA / 401(k) Analysis.
Learn more: https://www.generationswealthmgt.com/
Registered Representative & Securities Offered Through Capital Synergy Partners, Member FINRA/SIPC , 2860 Michelle Dr. Suite 150 Irvine, CA 92606, Phone: 888-277-1974
Generations Wealth Management Group and Capital Synergy Partners are Unaffiliated Entities.
Recent Interviews and News
Richard Hanson discusses financial confidence in retirement: Richard Hanson President of Generations Wealth Management Interviewed on the Influential Entrepreneur Podcast Discussing Financial Confidence in Retirement – Authority Press Wire
Richard Hanson discusses living retirement to the fullest: Richard Hanson President of Generations Wealth Management Interviewed on the Influential Entrepreneur Podcast Discussing Living Retirement to the Fullest – Authority Press Wire
