Portfolio Not Doing So Well? Maybe Take Social Security Instead

If you’re like me, you’re nostalgic for last week, when the stock market jumped and was looking so promising. So far this week, like a lot of this year, is a different story.

You’re probably not too happy when you look at your retirement balance today — especially when comparing it to Dec. 6 a year ago when the Dow Jones Industrial Average jumped 1.4%. But what about a year before that in 2020, when the index dropped 0.5% amid rising COVID-19 cases ? That wasn’t such a happy day.

My point, and I do have one, is that now is a good time for a platitude to help get you through these tough times. I like “this too shall pass.” Stock market bad times don’t last, and the only way to get through these times is to bear that in mind.

Also, after every downturn I’ve had the exact same thought: Why didn’t I buy more? I should have shoveled money into my accounts! And I know that in X amount of time, I’ll be thinking the same thing about the period we’re in now.

If you’re facing retirement soon this can be an especially rough time. You’re probably looking at a sharply lower retirement balance just when you want to stop working. Here’s something to keep in mind: you don’t need that entire amount of money at once, so there is time to let it recover via the markets. So turn to other sources, such as a cash reserve, to get through this time.

Another thing to consider might seem foolhardy, but it’s worth thinking about. Consider leaving your portfolio alone, and claiming Social Security benefits early instead. The conventional wisdom says you should leave your Social Security account alone as long as possible, at least until full retirement age, and possibly later. But that may not make sense for everyone right now. Calculate your possible longevity based on your family’s history and your own health, and how much time it might take for your own retirement assets to recover.

For more, read our story on why you might want to consider claiming Social Security early.