(NewsNation) — As inflation in America reaches 8.5 percent, the highest level it’s been in 41 years, one financial expert is offering advice to retirees, who, she says, have “been hit especially hard. “
“Inflation right now is particularly harming those that are in their retirement years because they’re pretty much on a fixed income,” Kristin Myers said Tuesday on NewsNation’s “Rush Hour.”
Myers, editor-in-chief of the financial website, “The Balance,” went on to say because the cost of everything is increasing, interest rates are on the rise, too, which inevitably impacts retirement plans.
“If you are close to retirement years or you’re in your retirement years and you’re looking at that 401(k), what you have here is a situation where you have essentially almost every asset declining,” Myers explained.
And because the older you become, the less risk you’re going to want in your investment portfolio, Myers says, given the current market, it might be time to change strategies.
“You want to be reducing the amount of stocks you have in your 401(k) and increasing the number of bonds you have in your accounts,” she advised.
Myers went on to say that the past couple of days is a good reminder for those who are either looking right at retirement or in retirement right now who haven’t made any changes in their retirement accounts to go ahead and do so, to avoid being “clobbered.”
“If you’re someone who’s 30 years old, you have another 30-plus years to recover from some of these losses in the markets. But that’s not the case right now if you’re going to be retiring in the next six months or a year, or you’re essentially in retirement right now,” she said.
To mitigate the risks, Myers says to retiring hopefuls should “pare back on stocks,” and to start looking at bonds.
“They’re are less volatile, they are usually guaranteed and backed by the U.S. government, so they’re a far more safer investment, she said.
She also says to reallocate your stock portfolio to safer bets.
“The environment that we’re in right now, with higher interest rates, don’t favor some of those tech stocks. You’re going to want to start looking at some of the less-sexy stocks like consumer staples and utilities,” she said.