Focusing on what we can control to lower financial stress

Market volatility, inflation, rising interest rates – with all of that in the headlines, no one wants to look at their financial statements right now.

Money is emotional. When we see the impact of inflation on what we’re paying each week at the grocery store and the gas station, when we decide to postpone making a big purchase or going on vacation to avoid debt, we feel it. Some people may wind up taking on more debt, and others may reduce their retirement savings – and that’s not good for the long-term.

It’s been especially tough for people early in their careers. Even before this year’s headwinds, three-quarters of Gen Z and millennials reported feeling financially stressed.

When things feel uncertain, I like to focus on what I can control. At TIAA, we’re advising clients to focus on the Golden Rules of Investing:

First, always have a plan. Stick to your overall financial plan and consider getting a portfolio check-up. If you’ve never sat down with a financial advisor, this could be a great time to get started. You’ll feel better seeing everything mapped out for the long-term. Getting started may feel like a big hurdle, but it could be easier than you think. Employers increasingly are offering financial planning support, either with advisors or online financial tools.

Second, never try to time the markets. It can lead to the classic mistakes of selling low and buying high. Instead, focus on continuing to save consistently.

In my first job, I signed up for my workplace retirement plan before I got my first paycheck. If you start saving right away, you won’t miss that money. And contribute enough to take full advantage of any company matching contributions. Saving less is like leaving money on the table – or effectively giving yourself a pay cut.

What if you don’t have access to a retirement plan through your job? You can set up your own IRA. You may not be getting a match, but any earnings will be tax deferred.

The sooner you start saving and investing for retirement, the more time you’ll have to take advantage of?the power of compounding.?And compounding is simply too good to put off – it’s what happens when earnings on your savings are reinvested to generate their own earnings, which in turn are reinvested to create more earnings, and so on. Over time, compounding can add a lot of fuel to the growth of your savings.

Finally, no matter what the markets are doing, always allocate at least a small part of your portfolio to guaranteed income for retirement. At a time when 40 percent of Americans run the risk of falling short of money in retirement, guaranteed lifetime income options like annuities can help close the gap.

I said earlier that money is emotional, and it’s also personal. I’m committed to helping people get started saving for retirement early because of what I have experienced in my own life. When I was studying finance in college, my father, who worked in a warehouse for a big company, asked me to take a look at his retirement statements. He was in his company’s pension plan, but he had not realized that the 401(k) plan was meant for him, too. I had to tell him he couldn’t retire when he expected, and I watched him work so hard to catch back up.

That’s why it’s so important to make a plan, continue contributing when the markets get rough, and protect yourself with an allocation to guaranteed income. Small actions like these add up over time.

As my father always says, “It’s not about what you make, but what you keep.”

?

All guarantees are based on TIAA's claims-paying ability.?

2586555

?