Fiscal cliff looming, but experts say retirees should not panic
There has been a considerable amount of discussion surrounding the potential implications of the so-called "fiscal cliff," especially as they relate to retirement planning. The expected spending cuts and tax hikes if Congress can't reach an agreement may seem bleak, but some experts say they should not cause panic, according to U.S. News and World Report.
For starters, some financial analysts say it's important not to change course too drastically. Retirees and those getting ready to leave the workforce, should have the same focus on having cash saved so they can spend it on unexpected medical expenses, traveling or heading back to school. Having money set aside that won't respond to changes in the stock market is essential.
As for more long-term investments or saving strategies, experts recommend not diverging from the path too much. Maintaining a diverse investment mix is a good idea, according to the publication. Additionally, selling certain types of stock in advance may be misguided, especially if Congress avoids the fiscal cliff altogether.
"We can get overwhelmed by what's going on," financial expert Dan Keady told U.S. News. "Some of it really remains the same."
While there may not be cause to panic, that doesn't mean there won't be some implications of going over the fiscal cliff, according to AARP. The across-the-board spending cuts may leave benefits such as Medicare or Social Security alone, but they will impact other services some seniors rely on, including meals, transportation programs and housing.
Going over the fiscal cliff could also cause banks to keep interest rates low, which could potentially reduce the amount retirement savings are allowed to grow in the coming months and years.