According to the Bureau of Labor Statistics, the April US unemployment rate increased to 14.7%, the highest level since the Great Depression. Market volatility is at levels last seen during the 2007-2008 financial crisis. We are in an economic environment that many of us have never seen.
It is times like this that we are reminded of the importance of being prepared for the potential loss of income or investments. It’s not a new concept-the protection and management of your finances should always be a priority. But now, seeing so many people out of work and in financial distress, we really understand the wisdom and rationale behind the idea. Read on as we present four areas to help you assess your current financial situation and level of preparedness.
Now more than ever, it’s clear that having an emergency fund should be considered a necessity. Whether you need to start saving or need to increase your current savings—make a positive change now. Having an emergency fund (a minimum of 3-6 months’ worth of expenses is recommended) not only helps to reduce stress in a time of crisis, but it can protect you against incurring debt or tapping into your retirement savings. When looking for the money to place into the emergency fund, you may want to reevaluate those areas in your budget that you considered essential prior to the current crisis.
Click here to open a liquid investment for your emergency fund or learn how AGFinancial can help you as you build your emergency fund, while receiving a competitive rate and helping to grow ministry.*
Consider if you should keep a limited amount of cash on hand in the event of an emergency. Whether it is needed to make a curbside purchase, help someone in need, or a widespread power outage, it may not always be convenient or possible to access your bank account or use a plastic card. You do not want to keep a lot of cash at home, just enough perhaps for a week of groceries. And for security you might want to consider a small fire-proof safe.
If the recent market volatility has kept you up at night, it may be time to reevaluate your risk tolerance. Be sure to consider how near to retirement age you are, and whether there would be time for your portfolio to recover in the event of another large market correction. Learn more about risk tolerance here. If you are comfortable with your risk tolerance and you have an investment plan, you may not need to change your approach, but you still may need to rebalance your portfolio. Large swings in investments, as we have witnessed lately, can cause your portfolio to veer from the target strategy that you had put in place. This means the investments are “out of balance,” and rebalancing might be necessary to maintain your appropriate level of risk and return.
If you have not yet started saving for your retirement, now is the time to start. AGFinancial provides a 403(b) plan for AG credentialed ministers and ministry employees. We also provide IRAs (individual retirement accounts) for those without access to an employer-sponsored plan or as a supplement.
Many of us have sheltered at home during the COVID-19 pandemic, connecting on social media, baking, or streaming our favorite shows. The slower pace may have allowed us time to declutter and focus on what’s most important to us. As we begin moving forward and starting to return to work and life as we knew it, we can continue to reduce clutter and simplify in all areas of life.
Regarding your finances, you may have multiple retirement accounts that you can roll over into a single account to better align your investment choices and to reduce paperwork. Also, when it comes to managing finances, our secure tool, Online Access, makes it easy to stay connected and make changes to your investments or accounts when it’s convenient for you. It’s easy to automate your emergency funding or retirement contributions.
We are here to help as you take the time to review your finances, develop new goals, and if needed, determine your next steps.
* This is not an offering to sell securities referred to herein and we are not soliciting you to purchase these securities. The offering is made only by the Offering Circular which includes risk factors. The Offering Circular may be obtained in writing or calling AGFinancial or by clicking here. AGFinancial investments are offered and sold only in states where authorized or exempt from authorization. Not available to new investors in Washington. Not available in Ohio.
Not FDIC or SIPC Insured. Not a Bank Deposit. No AGFinancial Guarantee.
AGFinancial is a DBA of Assemblies of God Loan Fund, an affiliated entity of Assemblies of God Financial Services Group