The Dow closed above 50,000 for the first time on Feb. 6, gaining over 1,200 points in a single day. The milestone reflects strong investor optimism — but for Americans nearing retirement, it also raises an important question: What should you do next?
If you’re nearing retirement, here’s what this market milestone should mean for your financial planning.
The Dow Reaches Record Highs: Why That Matters for Near-Retirees
“As markets reach new highs, advisors and their clients often take the time to assess where they stand with regard to their retirement goals,” said David Byrnes, SVP and chief distribution officer at Security Benefit and Eldridge Wealth Solutions. “Market volatility ebbs and flows from year to year, so many will seek ways to rebalance their portfolios in reaction to market moves.”
He noted that while we are in a “flow,” this won’t last forever.
“With each new high, we also face the potential of a correction of some kind — and that uncertainty can turn challenging at any moment,” Byrnes said.
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How Near-Retirees Can Protect Their Savings in a Volatile Market
For investors approaching retirement, the goal isn’t maximizing returns — it’s protecting what you’ve already built.
“Take the time to consider where you stand on your retirement journey,” Byrnes said. “If you have seen strong asset growth from the bull markets of the past few years, with markets reaching all-time highs, it may be prudent to take a more cautious approach and take some off the table with downside protection products.”
Byrnes recommended considering adding fixed annuity products to your portfolio.
“Fixed annuities still offer compelling rates that can be locked in for the next several years,” he said. “If you want to participate in potential further market gains, fixed index annuities are an option that credits some of the positive market performance while guaranteeing the principal.”
Annuities have several benefits that can be valuable to many people on the cusp of retirement.
“Annuities are a smart way to diversify a portfolio for a near-retiree, reduce risks and take advantage of tax-deferred growth potential,” Byrnes said.
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This article originally appeared on GOBankingRates.com: Dow Hit 50,000 in February: What the Market’s Historic High Means for Your Retirement
