Retire with Money July 1

It’s been a close call for your 401(k). Last Friday, following Britain’s vote to exit the European Union, the Dow Jones industrial average plummeted 610 points, then dropped another 250 points on Monday. But by week’s end the market had recovered much of that lost ground. Whew. Still, you can expect more market shocks in the weeks and months to come, whether from Brexit fallout or something else entirely. So treat this recent crisis as a financial stress test. How well did your portfolio hold up? Were you able to sleep at night? If your answers are “worse than I expected” and “not a wink,” act now to crash-proof your portfolio before the next meltdown. That includes revising your asset mix to better suit your true risk tolerance. You may also want to top up your emergency fund. Pre-retirees and retirees should hold enough cash to fund living expenses for 18 months or longer. Knowing you can ride out market dips makes it easier to ignore the financial news and just enjoy the rest of the summer.

Best wishes,

Penny

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