the federal reserve’s annual stress test revealed last week that banks have enough capital to continue their operations through a possible recession now is a good time for preretirees to follow the central bank’s playbook and put their own finances to the test workers on the cusp of retirement may be rethinking their plans in light of skyrocketing inflation and declining portfolio balances while stocks recovered some of their ground this week the sp 500 is still down about 20 for the year and many pros think it hasn’t hit bottom yet yet even as workers may choose to stay on the job a bit longer the risk of layoffs rises “in markets like this voluntary retirement goes down but involuntary retirement typically goes up“ said sri reddy senior vice president retirement and income solutions principal financial group  during the early months of covid19 the unemployment rate of workers 55 and older rose higher than for younger workers increasing by 122 percentage points for women and 87 percentage points for men according to research from the federal reserve bank of atlanta it isn’t a cause for panic but it is a call to prepare here are ways that preretirees can stress test their finances it can be hard to increase your savings when the price of everything from gas to groceries is skyrocketing just over a third of americans have less in emergency savings than a year ago according to a recent survey from bankratecom yet financial advisors recommend that you keep a cushion of about six months’ worth of essential living expenses in cash one easy way to pad your savings is to move your account from a big traditional bank offering just 001 interest to an onlineonly bank offering around 10 it’s graduation season and preretirees with children might find themselves newly flush after college tuition payments have ended funnel that excess right into savings before you get used to spending it it is also a good idea to review credit card statements for recurring charges that you might have forgotten about and cut out streaming or other services that you aren’t regularly using check out these other tips for coping with high inflation one danger for investors in a down market is to overcorrect it might be tempting to pull your money from stocks and put it into a “safe” vehicle to wait out the recession but there is never an allclear signal to get back into the market once you finally feel comfortable enough to venture back in you’ll have missed much of the rebound and will recoup your losses much slower than someone who stayed invested over a 20year period missing the 10 best days in the market results in annualized returns that are roughly half of what you would have gotten had you stayed the course according to research from jp morgan asset management and those best days tend to cluster within two weeks of the worst days so a move that seems safe at the time is actually risky since it increases the chance that your portfolio won’t last as long as you need it to said stephen b dunbar iii executive vice president with equitable advisors in atlanta one defensive move that you can make if you are worried about your portfolio’s longevity is to work for as long as possible he added if not in your main career then in a parttime job if you get laid off it might be tempting to claim social security right away but it is best to hold off if you can waiting until age 70 gives you what the social security administration calls delayed retirement credits that will boost your benefits to at least 124 of what they would have been at your full retirement age the percentage is higher for those born before 1960 if waiting that long seems impossible remember that it isn’t an allornothing proposition every month you wait increases your check by a little bit an annuity can help bridge the gap and cover your basic expenses until you claim social security there are many types of annuity but one that could work in this situation is a periodcertain singlepremium immediate annuity which functions like a pension and pays a guaranteed income for a fixed amount of time reddy said spias are available for a fixed period or for life as of midjune payouts on a lifetime spia for a 65yearold who buys a 100000 policy are up about 20 over the past year for men to 636720 annually and up about 23 for women to 6231 annually according to an illustration from new york life the typical spia customer is between 65 and 70 new york life said