The stock market, as always, has its share of ups and downs, and as a result, some retirement portfolios are significantly lower than they were a few years ago.

If that describes your situation, you may be worried about the long-term impact on your retirement plans. If so, consider the following:

  • Reevaluate your retirement plans. Go through the calculations to determine how much you should save annually, using your portfolio's current value in those calculations. You may want to adjust your assumed rate of return, based on expectations that stock returns won't be as high in the future or if you don't want to be so heavily invested in stocks. You may find you need to significantly increase your savings amount. If retirement is many years away, that may be enough to overcome declines in your portfolio's value. If you plan to retire in a couple of years, you may have to rethink your plans.

  • Use tax-advantaged ways to save. You should ensure your savings are working as hard as they can. One way to do that is to save in a tax-advantaged manner, such as contributing the maximum to your 401(k) plan. Contributions are made from pre-tax dollars and earnings grow tax deferred until withdrawn. Additionally, many 401(k) plans offer matching employer contributions, which is money you pass up by not contributing. Also look into traditional and Roth individual retirement accounts. 

  • Diversify your retirement portfolio. Different asset classes move up and down at different times. By combining different asset classes in one portfolio, these variations tend to be smoothed out, lessening your portfolio's risk. Make sure your portfolio is diversified among a variety of investments. 

  • Before retiring, make sure your cash and fixed-income investments cover three to five years of retirement expenses. That way, you won't be forced to sell your stock investments during a market decline to pay living expenses. 

  • Consider postponing your retirement date. Or you may want to consider working part time after retirement. You may not be able to reach your savings goals as soon as you would like, so you may need to work longer. 

  • Decide whether you want a professional to help manage your investments. You may feel more comfortable with your investments managed by a professional, so you don't have to make all investment decisions yourself.

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