From Retirement Now Newsletter June 24th 2021
We’ve been experiencing shortages of various items this year and some last year. And for various reasons.
For instance, the biggest shortage issue that I’m facing now is chlorine tabs for my swimming pool. The cause?
A fire in a chemical plant in Louisiana last year which reduced manufacturing capacity.
Or how about gas shortages earlier this year?
The cause… Colonial Pipeline having their computer systems hacked.
Perhaps the most notorious shortage was one that occurred last year. The great toilet paper shortage.
The cause… panic buying when the pandemic panic was just rolling out. (pun definitely intended)
The last two shortages seem to have leveled out and returned to normal. And I’m sure the first one will too given enough time.
And it causes stress when these shortages occur and the media fan a lot more of the fear flame to keep their ratings up during these events.
But one thing that comforts me even more than finding a 24 pack of jumbo rolls during a toilet paper shortage is the fact that whenever shortages occur there are businesses behind the scenes that want to make money and find ways to get enough of the product back on the shelf. That’s one of the biggest benefits to the free market: there are other people out there that can worry about a problem and get paid for solving it, so I don’t have to worry about it.
That, and people find alternatives in the meantime. I hear people are finding alternatives to chlorine tabs right now. And I may have to as well eventually.
And most alternatives can get you by during the short-run.
Even though one clerk’s suggestion of paper towels to me during the TP shortage was not going to cut it.
But when the world temporarily goes crazy it’s good to be able to ride things out.
And the same goes for a retirement investment portfolio.
The truth is markets will go up and down. Which means your portfolio will do the same thing. The important thing to remember is how you structure that portfolio if you are needing to take regular monthly withdrawals from it in retirement to supplement your Social Security. You want to be able to ride out those times when your portfolio is down and not sell shares at loss if it can be avoided.
This often times means having access to some cash on hand to live on temporarily, giving your portfolio time to rebound. Or even using withdrawals from more stable accounts that aren’t as volatile as equities, such as bonds or fixed annuities.
None of us can stop shortages from happening in the future, but we can take steps to be better prepared for investing in retirement.
If you want to see how a bear market could potentially affect you in retirement based on how you are currently invested, click here to book a 20 minute chat with me. We can discuss it.