Racquel Oden knows about retirement. This U.S. head of wealth, premier and global private banking at HSBC has been in the industry for over 25 years and has always worked with individual investors, supporting their wealth management and asset management needs.
Gen X is up next to retire—and for people in their 40s and 50s, that means understanding that retirement is now just around the corner during times of extreme market volatility. But that doesn’t mean that they won’t be able to retire. With savvy investing strategies, Oden still believes that investors of any age can achieve their “financial glow-up” in any market and with any time horizon.
Here are five tips from Oden for how to create a successful retirement plan.
1. Work with a professional to understand your portfolio
“I truly am a believer [that] it’s okay to seek advice, because these are very complicated markets right now,” Oden says. “There are periods where you feel like you can kind of make sense of all of it and kind of make your own individual decisions. And there are going to be periods in the market where you actually feel the need for professional advice. I think we’re in one of those periods.”
Even the worst market has some strong opportunities—so working with the right person can ensure that you’re making smart decisions about your investments.
“While volatility may feel very extreme on you personally, that means there’s a lot of lows, which means that’s a buying opportunity,” she says. “But you want to make sure they’re in the right sector.”
Knowing how the world around you affects your portfolio can help you make savvier choices about where to direct your portfolio. For example, the effect of tariffs can vary from industry to industry.
“What’s also important in times like this—of volatility—is staying very engaged in what I call active management,” she adds.
2. Evaluate your short-term versus long-term needs
“The things people are always going to ask you are, ‘What’s your risk tolerance?’ and ‘What’s your time horizon?’” Oden says.
Your time horizon is the amount of time (months, years or decades) that you need to contribute to an investment in order to achieve your financial goals. An individual who plans to retire in five years, for instance, may want to opt for a less aggressive investment strategy than someone who still has 20 years.
“You could be a lot heavier weighted in equities or riskier products, but you have long-term benefits to gain in that period of time,” she says. “If we have short-term needs in this environment today, things such as treasuries [are] a very good thing to look at.… [And] I think gold is doing extremely well.”
Whether you’re retiring right now or in 15–20 years, there are still certain things that you should always be doing.
“Make sure that you’re making out on what I call your tax benefits, such as your 401k, your IRA and your HSA,” Oden advises. “[It’s] important that you’re leveraging the dollars that you’re making and [that] you’re getting… tax-deferred benefits from it. So I use that as a fundamental, no matter what stage of life you are [in].”
3. Define your future expectations
“I think people think of [retirement] as like an administrative thing,” she adds. “But that’s why you work so hard now on your investments and gathering of your savings and assets—so you can live this version of the lifestyle that you define for yourself.”
Different people have different expectations of what retired life should be like. For example, if you’re planning on living in an RV after you retire, you probably have very different needs than someone who owns multiple homes and wants to live a snowbird lifestyle.
“What do you want it to look like?” Oden asks. “Based on that is how you should actually be crafting your investment portfolio to help you live that lifestyle that you define.”
4. Begin to address your debts
It’s also important to work toward eliminating all your debts when you’re gearing up for retirement.
“In your 20s and 30s, you can take on a lot more debt [since] you’ve got a lot of time,” she says. “As you’re getting to your 40s and 50s and you’re getting 10 years away from retirement, you want to start thinking of things like, maybe you don’t have five homes at the same time.”
If nothing else, it’s especially important to eliminate high interest debts like credit cards, as these can heavily restrict your cash flow and lead to financial strain.
“That’s what’s really going to change when you hit retirement,” Oden says. “Very little is coming in and a lot is going to go out.”
5. Plan for and embrace longevity
One of the most important things to remember is that you’re probably going to live longer than you expect—and so are the people around you.
“In the 1970s, the average life expectancy was closer to 69, and today, the average life expectancy is already at 77,” Oden says. “That’s just going to continue to increase as we continue to improve on things such as health care.”
But when you’re responsible for your kids and aging parents, that can feel like more pressure.
“You are what I call the sandwich generation,” she says. “You could have your 20-year-old kids that you’re still supporting, and because we are living longer statistically, your parents are around longer—and then you will be around longer. That actually puts a lot more pressure on us in retirement.”
While you may find that you have extra expenses, like caring for your parents or children, you also need to consider (and celebrate) your own longevity.
“You’re worrying about yourself because you’re going to live way longer,” Oden says. “So that now means you have to have a lot more money for retirement since you’re going to sustain your lifestyle longer.”
Photo courtesy of Racquel Oden
