How can I prepare for the “Fiscal Cliff?”
Proactive Measures that Can Help you Avoid Loss
By Kim O’Brien
A recent column in Nevada’s Henderson Press outlines some useful steps Americans saving for their retirement can take to help them prepare for the so-called “Fiscal Cliff”—a combination of tax hikes and spending cuts that are scheduled take place at the end of the year if Congress doesn’t reach consensus.
As the column notes, one impact of the fiscal cliff is the expiration of the Bush tax cuts—which would mean higher income tax rates. The other major part of the fiscal cliff is automatic spending cuts that, if implemented, will slash federal spending by approximately $1.5 trillion over ten years.
With huge spending cuts hitting Americans at the same time as tax hikes, the economy could contract, resulting in a recession and subsequent market volatility. Given this uncertain situation, it’s important for those in or nearing retirement to evaluate their risk tolerance and adjust their financial plan accordingly.
More specifically, products that do not lose value even when the stock market goes down—like a fixed indexed annuity—are worth further exploring. To learn more about how a fixed indexed annuity may positively contribute to your long-term financial plan, check out this brief educational video.