You can't control the wind, but you can adjust your sails.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act that was signed into law on December 20th might be adding more chatter to all the 2020 financial predictions bouncing around your news feeds. Throw in an upcoming presidential election and the talking heads might have your head spinning right now.
However, you probably noticed that most of the things that the “experts” are warning you to prepare for are things beyond your control. Rather than stare into a crystal ball and make predictions, we prefer focus on how we can help folks get the best life possible with the money they have – no matter what happens in 2020.
You can’t control the global economy …
Brexit, tariffs, the US – China trade dispute, changes to energy and agriculture policy, mergers and acquisitions, and half a dozen surprises are going to affect how the world does business in 2020. Anyone’s guesses about how these factors will – or won’t – ripple through your portfolio are just that: guesses.
… but you can control how you make money.
No one loves everything about their work. But if you’re sticking with an unrewarding job for another year because you feel like you have to, you don’t. You can control the mindset with which you approach your job and appreciate how your efforts improve life for your end customers and for your family. Or, you can explore how you could reapply your existing skillset and interests in another, more fulfilling field, or at a different job with your current employer.
You can’t control the markets …
Here’s a prediction you can take to the bank: at some point in the next 12 months, something unexpected is going to send the markets into a tizzy. A Silicon Valley unicorn is going to have an underwhelming IPO. An earthquake on the other side of the world is going to require a big influx of aid. An election is going to spark two very different reactions from two very different groups of investors. In the short term, the market will go through a correction that sets off a whole new wave of doomsaying.
… but you can stick to your long-term plan.
In the long run, that correction is going to register as another small dip on a line that continues to trend upwards. As you’ve probably heard us say before, market volatility is just a tax that investors have to pay on wealth-building. Sticking to our long-term plan is a much safer and more reliable strategy than trying to “time” your savings and investments based on today’s headlines.
You can’t control our politics …
Well, you do have SOME control here … if you vote!
But if you think back to 2016, you’ll recall that much of the handwringing about what this or that candidate would mean for the economy didn’t amount to very much. Many of the economic ideas that floated around Washington during the campaign and after the election were just hot air. We did see new tax and retirement-planning laws passed, but ultimately, the economy is bigger than any one president – especially when we’re planning for a retirement that’s going to last upwards of 30 years.
… but you can control how you adjust to new policies and life changes.
Of course, that doesn’t mean nothing has changed in the last 4 years. The new tax laws have affected how some folks manage their deductions and charitable giving. And the SECURE Act could impact your required minimum distributions and estate planning.
Whether or not you agree with certain politicians or policies, these are just some of the ways that your life is going to change as you get closer to retirement. The more prepared you are for things you CAN predict – like kids going to college – the better equipped you’ll be to adjust for things you can’t predict.
Let us know if you'd like to discuss how recent changes to tax and retirement planning could affect your financial plan, and how we can help you make 2020 another prosperous year.