Nearing Retirement? Keep Focused.

Here are five tips to consider when the financial markets tumble.

After a lifetime of working and saving, retirement is in your sights. But then, the stock market takes a jaw-dropping nosedive. If you have 10 or fewer years until retirement, here are five tips to consider to help you weather this storm:

1. Take a deep breath.

Market volatility is unnerving, but that doesn't mean individuals should shy away from the growth potential the markets have provided, historically. There's a good chance that a 65-year-old retiring today will need their money to last 25 years or more. This means you may have more time to ride out a market downturn and continue to build savings than you think.

2. Take full advantage of your plan.

One of the best ways to help yourself build sufficient savings for the future is to maximize the amount you sock away in your retirement plan.1 This includes contributing enough to take full advantage of an employer match, if offered. Individuals age 50 and older can also make a catch-up contribution of up to $6,500 in 2020.2

3. Build your safety cushion.

Consider adding to your emergency fund. This, along with Social Security and any pension you may have, can provide the ready cash you may need to cover essential living expenses in retirement. It may also help you avoid tapping into your portfolio during a market downturn, when prices may be lower.

4. Review your asset allocation.

If you haven't reviewed your asset allocation recently, it may be a good time to do so. What was right for you in your 30s and 40s may no longer be appropriate in your 50s and 60s, when your investing time horizon is much shorter. This is why it is very important to have a diversified portfolio of both equities and bonds that is appropriate for your time horizon and investment objectives. Once you review your allocations, see if you need to rebalance your portfolio to bring it in line with your current goals.

5. Consider a Roth conversion.

Certain plans allow individuals to convert some or all of their retirement savings to a Roth (called an in-plan conversion). If your plan permits it and you decide to take this approach, you'll owe income taxes on the amount you convert. However, your taxes may be lower in a down market, when your retirement savings have likely fallen in value, than if you wait until the market recovers (and with it, your portfolio) to convert your account. Of course, because the amount converted is taxed as ordinary income, you also may wish to consider your current marginal tax rate and the rate you are likely to pay in the future. The amount you convert will grow tax-free and can be withdrawn free of income taxes at retirement (assuming you are 59½ or older at the time and have held the account for at least five years). Please consult with your tax adviser to determine if a Roth conversion might be right for you, based on your specific circumstances.

If you have questions about your retirement savings, please call your local Mutual of America representative today.

1

If you contribute to a TDA, 403(b) Thrift and/or 401(k), the total amount contributed to all plans may not exceed $19,500 ($26,000 to all plans, if age 50 or older).

2

Tax-Deferred Annuity, 403(b), 401(k) and Governmental Section 457(b) Plans. Section 457(b) Eligible Deferred Compensation Plan participants can make a special catch-up contribution if they are within three years of their normal retirement age.


You should consider the investment objectives, risks, and charges and expenses of the variable annuity contract and the underlying investment funds carefully before investing. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses, which can be obtained by calling 1-800-468-3785 or visiting mutualofamerica.com. Read them carefully before investing.

Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment options you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should consider a variable annuity contract's other features before making a decision.




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