Five tips for financial resilience

With the new year fast approaching, it might be a great time for seniors to reevaluate and revamp financial goals and strategies to take into 2024.

The key to financial resilience is a long-term strategy that’s customized to the individual or family’s unique circumstances and goals. For clients at or near retirement, that strategy may include having enough cash reserved to ride out a market downturn without having to draw from retirement savings or investments.

The words “resilience” and “resiliency” have been used frequently in conversations. In everyday language, resiliency is the ability to “roll with the punches” and carry on despite life’s challenges and setbacks. Financial resilience is the ability to withstand life events that impact one’s income and/or assets. Some financially stressful events, such as unemployment, divorce, disability, and health problems affect people individually. Others, such as recessions, stock market downturns, and acts of terrorism, affect society as a whole.

Here are five tips for financial resilience that everyone should keep in mind for 2024:

Have a financial strategy with a long-term view. Without a financial strategy in place, it can be tempting to react emotionally to market changes. A long-term strategy anchored to one’s prioritizing goals and values can help keep them steady in tumultuous times.

Look for opportunities. What’s the next best financial choice a person can make? Maybe it’s paying down their debt or building up their emergency savings fund, or perhaps it’s rebalancing their investment portfolio. Whatever it is, they’ll likely benefit from meeting with a financial advisor to discuss their financial goals and what they might be able to do to strengthen their financial future.

Consider diversifying income. The rise of remote work and gig apps has opened up a new opportunity beyond traditional full-time jobs. Many retirees are delaying retirement, working part-time, or even starting new careers to provide additional income and professional fulfillment.

Recognize that nothing lasts forever. The markets and the economy are cyclical, with economic expansions followed by contractions and economic contractions followed by periods of expansion. Take heart, tough times eventually will give way to growth.

It is an ever-changing environment, so at any age a person should never stop learning. Increasing knowledge of financial topics to make smart financial decisions is wise. Here’s to a great 2024!