April has been a wild month for the stock market. Tariff announcements sent stock values plunging, while a pause on tariffs afterward led to a modest rally.
But as much as all of this stock market volatility has been stressful for working Americans, it’s perhaps been even more stressful for retirees. That’s because workers who are decade away from ending their careers have a long time to ride out this current storm.
Retirees, on the other hand, tend to need their portfolios to provide income. So when stocks tank, it can be hugely problematic.
If you’re nearing retirement, it’s important to make sure you’re well-protected from stock market volatility. And a good way to do that is to make sure your portfolio is age appropriate. That means not being too heavily invested in stocks, and having a diverse mix of assets within your portfolio.
But there’s also one key Social Security move you can make to help protect yourself against stock market turbulence during retirement. And it may end up giving you a world of peace of mind.
Larger Social Security checks can make up for portfolio declines
If you set up your portfolio right, a moderate stock market decline doesn’t necessarily have to upend your retirement income. But a prolonged downturn could have an impact.
If your portfolio loses a lot of value and really doesn’t recover for many years, you might only be able to leave the stock portion alone for so long. That’s why it’s important to have stable assets within your portfolio, as well as assets that are capable of producing income. If you’re getting paid interest from bonds and dividends from stocks, that income can help offset losses.
Similarly, larger Social Security checks for life could help make up for losses in your portfolio that come as a result of a stock market crash. So if you want to set yourself up with more generous monthly benefits, make a point to delay your Social Security claim past full retirement age (FRA).
FRA is 67 for anyone who’s born in 1960 or later. But if you delay your claim beyond that point, your benefits will be boosted by 8% per year, up until you turn 70.
Having extra money coming in each month from Social Security makes you less reliant on your investment portfolio. And that means a prolonged stock market crash may be much easier to get through.
Other ways to boost your Social Security checks
Delaying Social Security past FRA is perhaps the most effective way to score larger benefits each month. But there are a couple of other things you can do, too.
First, try boosting your wages during your working years, since the more you earn (up to a point), the more Social Security will pay you. If you’re missing skills that could lead to a promotion, try to learn them. And check in with headhunters on occasion to make sure your wages are up to par.
Also consider joining the gig economy if your industry caps out at a certain wage. Gig work counts toward future Social Security benefits as long as you’re paying taxes on that income (which you have to do anyway). And as a plus, a gig role might also make it easier to boost your long-term savings and stockpile some cash so you have even more protection against stock market events — both now and in the future.
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