How To Protect Yourself During an Upcoming Recession

Jan 30, 2023

man worried about recession

It’s no secret that the economy is in a state of flux. Experts are predicting an upcoming recession, and no one knows what to expect. While the government typically remains stable during economic downturns, there are a lot of “what-ifs” up in the air, especially as a federal employee worried about the future of your finances. If you’re feeling anxious about what could happen, don’t worry – we’re here to help!

During a recession, financial security is the most important thing, and typically the first thing you lose. You want to be sure that you have enough money to protect yourself and your family in the future, which can be a scary thing to try to predict. So, how do you ensure you remain financially secure? Keep reading to learn more!

How Can a Federal Employee Prepare for a Recession?

In order to properly prepare for a recession, it is recommended to speak with a financial advisor experienced with federal employee benefits. This will help to ensure your investments are in the best place to survive and thrive during an economic downturn.

You should also save as much as you can for emergency situations and to help prepare for your retirement. Now is not the time to be making big purchases or investing in anything that could be considered risky.

Going into a recession with the right mindset and confidence can make a huge difference in how you handle the recession and its aftermath. Make sure to stay informed of current events, stay up to date on market trends, and develop a plan for practical and financial security measures.

Maximize Your Retirement

As a federal employee, you have one of the best retirement packages available. You should be taking full advantage of your benefits while you are still employed in order to maximize your retirement. This will protect you for longer in the event of an economic recession and give you more financial security.

If you are not already contributing to your TSP, you need to start NOW. The government will match your contributions up to the first 5% which essentially doubles your investment. This allows you to grow your retirement funds faster and more efficiently.

If you are a veteran, you also have the ability to buy back your military time to increase your creditable years of service. Creditable years of service are used to determine your retirement annuity, and the more you have the more money you will receive in retirement!

Private Sector Investments

While the TSP is a great retirement benefit, there are many private sector investment options that can produce significant return in addition to your solid retirement funds. Private sector investments can be used to create additional income streams or act as a buffer if an economic recession hits.

Stocks, bonds, fixed index annuities, ETFs, etc. can all be utilized by federal employees looking to diversify their portfolio.

It is recommended to speak with an experienced financial planner in order to make the best decisions for you and your future.

Recessions can be intimidating and nerve-wracking, but with the right preparation, it doesn’t have to be. Protecting yourself during a recession is essential and there are options available to help secure your benefits now before economic chaos strikes.

If you haven’t been maxing out your TSP contributions or taking advantage of other private sector investment options, now is the time to start. Speak to a financial advisor to get started making the right decisions for you and your future. We know that recessions are scary, and no one knows exactly what will happen, but the more you plan and prepare now, the better off you will be.

Remember: no matter what happens, you are in control of your own financial security – plan ahead and stay informed so that you can make the best decisions for yourself and your family.

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