Retirees can prepare for potential recession by boosting cash reserves and cutting expenses

From Yahoo Finance: 2025-05-17 07:02:00

Headlines warn of an impending recession, with J.P. Morgan estimating a 60% chance in 2025. Ipsos poll shows 61% of Americans share this belief. Retirees can prepare by boosting cash reserves, cutting non-essential expenses, and considering part-time work for additional income.

During a recession, having cash on hand is crucial for seniors facing unexpected expenses. Experts recommend emergency savings of 6-9 months’ living expenses, with AARP suggesting at least 12 months. Putting funds in a high-yield savings account can maximize interest and provide a financial cushion.

Instead of selling stocks in a panic, consult with a financial advisor to assess your portfolio. Making informed decisions during market fluctuations is crucial to avoid locking in losses. The stock market has a history of recovery, so avoid drastic measures and maintain a long-term perspective.

Reviewing budgets and trimming unnecessary expenses can help retirees build cash reserves in anticipation of a potential recession. Temporary cuts like canceling subscriptions or reducing dining out can free up funds. Part-time work is another option to boost income and savings during uncertain economic times.

Retirees concerned about a recession should prioritize eliminating high-interest consumer debt. While not necessary to clear all debt, reducing it as much as possible is a tangible return on investment. Avoid accruing more credit card debt to maintain financial freedom and stability in the long run.



Read more at Yahoo Finance: 5 Smart Ways Retirees Can Prepare for a Recession