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  • johnlohrenz

The 3 things to do for a Recession Retirement Plan

Updated: Oct 6, 2022

This is a difficult time for people who are retired or considering retirement in the near future. We are heading into what could be a difficult economic period with a global recession staring us down.

The Federal Reserve has made a policy mistake and we are all paying for it at the pump, grocery store, 401ks, and soon our real estate will be sliding in value. They have told us we are going to have to go through some pain as they continue to raise interest rates to crush inflation and they are taking down the economy to do so.

I have been in the investment business through two very difficult periods from 2000 and the dot com bust to the financial crisis from 2007 to 2009. It was an absolute roller coaster ride. I was a branch manager at Merrill Lynch and managed a large group of retirees' investments and was responsible to keep their incomes intact despite huge drawdowns of 49% and 57%. I learned a great deal about surviving in disastrous markets.

The 3 things I recommend right now are:

1. Don't hide your head in the sand and not look at your statements. This is something that many investors do when things get bad and it is a mistake. If things get to a place where you need to make changes you have to be looking to navigate the storm. If you have an advisor ask questions and communicate if you are getting so uncomfortable you are losing sleep at night.

2. Trust your instincts over the mantras of the wall street crowd. If we are going into a recession and you feel strongly about it you should look to make the appropriate changes. It is common sense that a portfolio that works well in a low-interest rate bull market may not be the one that works in a rising rate bear market.

3. Look at the fixed income market for opportunities to take advantage of buying low. This is the worst market bonds have had since 1930 and there is real value in many sectors from low risk to high risk. 2-year Treasuries are over 4% and the range moves up the risk scale to some of the higher yielding BDCs paying 14% with the caveat that there is always a risk at those levels.

Dividends and fixed income are so valuable when markets are heading down or sideways for a period of time. Look to get paid while you wait with quality dividends and income. Don't be afraid to squirrel away some cash for a buying opportunity if things get really dicey.

If you have any questions we are happy to answer with no strings attached. Just reach out to us and let us know what's on your mind! Send a message to me at or call us at 858-535-1705. All my best!

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