Stocks closed in the red on Friday, marking the fifth straight week of losses on Wall Street.
Many of those nearing retirement are keeping a watchful eye, contemplating what to do next.
“I am close to retirement I’m watching that very closely it’s scary to see it lose 5-6%,” an investor on Michigan Avenue told NBC 5.
Another resident had a similar outlook on the market, citing the war in Ukraine, high gas prices and inflation as factors for this dip.
“Everything is uncertain, everything is upside down, the world is upside down, it’s on a roller coaster,” he said.
Financial advisors say they’ve seen situations like this before, and the best bet right now is to hold steady and to continue to plan for the future.
“The stock market actually for most people presents a fantastic opportunity, the stock market is the only thing that people don’t want to buy on sale,” Carla Nitz, a certified financial planner said.
Nitz has nearly 30 years of experience, has worked through historic dips, a pandemic selloff and a recession. She believes skids like the one seen on Wall Street are opportunities to get in on a cheaper price.
Bill Blyth, the founder of Blyth and Associates Financial Services believes a nest egg continues to be critical for times like these. But he doesn’t want you to store all your cash.
With inflation at 8.5%, he says keeping an eye on the value of money is critical when deciding what to do with it.
“You need cash, cash is good, but keeping cash for 30 years guarantees you’ll have the same amount of money, and things will cost a lot more in 30 years,” Blyth said.
While both financial advisors believe now is the time to capitalize on a volatile market, some people may be struggling more than others.
Some Americans are resorting to their 401ks to keep their heads above water.
Both Blyth and Nitz believe this should be your last resort, and if you’re near that point, a meeting with a financial advisor may be in order.
“If you take money out of a 401k and you are under 59 and a half not only do you have to pay taxes on it, you can get hit with an additional 10% penalty,” Nitz said.
That penalty could make all the difference as it’s money you’ll never get to use.
Instead, Nitz and Blyth advise you to meet with an expert and consider a loan.
“A lot of people do ready, fire, aim and then and ready, fire, aim is expensive…come and talk to somebody like us, and we will look at what the whole picture is and say hey here is your best option,” Blyth said.