Recession Watch: What to do if you're in retirement

With so much talk of recession, many retirees I talk to are in total panic and fear that they will run out of money during retirement. Take a breath, slow down and carefully assess your time horizon for when you'll actually need the money. Many retirees are living 20 to 30 years in retirement, so they need to have stocks in their portfolio -- even if the market is extra risky right now.

Cash equivalents and bonds will not have enough growth to offset inflation. So unless you have enough cash already saved to live on until you die and you don't need that cash to grow to keep up with inflation, you should have a portion of your portfolio in stocks.

How do you assess how much should be in stocks, how much in bonds and how much in cash equivalents? That's a difficult question to answer. If you haven't already figured that out given your current financial picture, I strongly recommend you sit down with a Certified Financial Planner now. I recommend that you find a fee-based planner and not a planner who will earn commissions based on what they recommend. If you don't know a good planner, search for one in your area at the Financial Planning Association.

Keep assets in cash that you need in the next two years. For safety and to avoid being forced to sell holdings at a loss just because you need cash, always be certain that you have at least two years of your cash requirements in the most liquid types of holdings -- money market funds, CDs or savings accounts. With these types of holdings, you never have to worry if the country slips into a recession. As you figure out how much cash you need, consider monthly income such as Social Security benefits, pension benefits and other income you know you can count each month.