Retirement Parachute: How to Plan for Market Crashes, Ep #81 

<p>Your retirement nest egg <em>has</em> to last the rest of your life. There’s a lot at stake. So what happens when you face an emergency like a market crash? Because crashes are inevitable and a natural part of the cycle, you must plan for them. That’s why you need to get a retirement parachute in place. Learn more about why a retirement plan is so important in this episode of the Retirement Made Easy podcast.</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[5:31] Why you need a retirement parachute</li> <li>[7:19] The most common emergencies</li> <li>[12:35] Listener question about life insurance</li> </ul> <h2>Prepare for the worst with a retirement parachute</h2> <p>If you’re going on a cruise, you have to expect that there are lifeboats onboard to safely evacuate passengers if the need arises. They’ll likely have life jackets, fire extinguishers, floating devices, etc. The cruise ship plans for any emergency that may arise. It’s the same for fighter pilots. They’ll have a parachute to evacuate in case of an emergency. If you live in Oklahoma—known for tornadoes—you’ll have a storm shelter. The common theme? <em>They all have an emergency plan</em>. </p> <h2>Why you need a retirement plan</h2> <p>The market will crash—it’s not a matter of if, but when. What will you do if the S&P 500 or Dow Jones drops 30–40%? What if your corporate pension gets cut? So what do you do? Create your retirement parachute—i.e. your emergency plan. </p> <p>Historically, when there’s a large market crash, like the 2008 crash or COVID, you can see the mutual funds and investments being sold off. It happens every single time. People sell because fear is a bigger emotion than greed. The fear of the unknown paired with temporary volatility makes people panic. If you don’t have a plan in place, you’re going to panic and make poor decisions that aren’t in your best interest. Don’t be a retiree caught without an emergency plan.</p> <p>Need help creating a retirement plan that prepares you for market f