The theme this week on the One Minute Retirement Tip podcast is: How To Recession-Proof Your Retirement.

Today, I’m talking about how understanding what a typical recession and stock market downturn look like will help you gain some much needed perspective on trying to recession-proof your retirement. 

The last recession - the pandemic recession was the shortest recession on record. Although the US economy took a steep dive, the recession officially lasted only about 3 months. 

A typical, post-WWII recession lasts about 11 months, and they happen about every 5 years. In general, retirees tend to be better equipped to deal with receissions. You aren’t worried about losing your job, you typically have more equity in your house, and more money in your bank accounts which can help you weather the recession storm.

Where retirees get clobbered are in a couple of ways - the stock market during a recession takes a nosedive. Drops of 30% or more are common. A drop of 20% or more is known as a bear market. On average, bear markets have lasted 14 months in the period since World War II. The S&P 500 index has fallen an average of 33% during bear markets in that time. 

14 months is the average time between the top of the market and the bottom. It could take much longer for the stock market, and your portfolio to return to the previous value. 

Once you know what to expect, you can begin to prepare for probable scenarios. If you’re taking portfolio withdrawals and a recession and a bear market hit, you’ll want to be prepared to stop your portfolio withdrawals or have other options at the ready, which is what I’ll be covering in the remaining episodes this week. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Visit the podcast page: https://truenorthra.com/podcast/ 

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance