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When markets go sideways, it can feel like all of your plans do, too. Recessions can bring with them a lot of uncertainty around life plans, from retirement dates to vacations to month-to-month spending to – well, I’m sure you don’t need me to continue the list!
After several years of a strong (if volatile) stock market, a recession can sting particularly deeply. Thankfully, you have a superpower in the back of your pocket for times like these: you have a financial advisor.
Now may be one of the best times to speak with your advisor. Your advisor will come with his or her own insights depending on your situation, but if you’re struggling to think through what to ask, here are a few prompts to get you started:
- What are your thoughts about current market and economic conditions?
It’s important to understand your financial advisor’s perspective on the current market and economic conditions. Share your own fears and concerns, as well, to gain a better understanding of the overall situation.
- What do different scenarios look like for this market?
Your financial advisor can provide insights on different scenarios for the market and how they may affect your finances. Understanding the potential impact can help you make informed decisions.
- How does this impact any of my upcoming plans (i.e., a retirement date, house renovations, etc.)?
If you have upcoming plans such as retirement or renovations, it’s important to discuss how the recession may impact them. Your financial advisor can provide guidance on how to adjust your plans accordingly.
- Are there any tax mitigation opportunities that the market presents?
During a recession, there may be tax mitigation opportunities that can help minimize your tax burden. Your financial advisor can help identify and take advantage of these opportunities.
- If retired: Do I need to adjust my withdrawals and spending?
If you are retired, it’s important to consider adjusting your withdrawals and spending during a recession. Your financial advisor can provide guidance on the best retirement income plan.
In addition to consulting with a financial advisor, there are other steps you can take to manage your finances during a recession. These may include reducing unnecessary expenses, increasing emergency savings, and diversifying your investments. For more information on managing finances during a recession, consult with a qualified financial advisor and check credible sources like the SEC’s website.
Talking with a financial advisor can bring great peace of mind in the middle of economic uncertainty. Bring these questions – or any other you may have to your next meeting with your advisor.