What If The U.S. Defaults On Its Debt?

Critical Thinking Required

The U.S. government has never defaulted on its debt, and it’s unlikely it will default this time either. But if it were to happen theoretically, it would have severe consequences for the country's economy and global financial markets, from rising interest rates to lower stock market prices, and from higher inflation to the end of the U.S. Dollar dominance. What can one do to prepare for such a disaster? Academics have differing opinions, but in real-life practice, our one golden rule is: position yourself well with complete and consistent financial planning and actually execute the plan. Don’t deviate from your ongoing investment contributions or distributions, be it your 401k or other retirement accounts. CONSISTENCY IS KEY. Nathaniel gave an example of 2011 when the U.S. came close to default, and what would have happened to your investment if you had sold everything in a panic vs. holding your position and riding the turmoil out.