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Baby Boomers, Know Thy Self

Many Boomers have saved their hard-earned money for years with plans of being able to retire. Some have faced job loss and various circumstances that have led them to not be able to retire – or at least not when planned.

For those who do have plans to retire soon or already are retired, having a plan to maintain their lifestyle without running out of money is the goal. We have found that many hopeful retirees may have a plan for how to have fun but may lack a plan to dole out their savings during retirement.

An income strategy can prove to be tremendously helpful, however, there is an essential aspect of a plan that can make or break it; sticking to the plan.

Many folks enjoy investing, but many more are forced to be investors out of necessity. The reality is that our money may not last the rest of our lives if we stop growing it once we retire. Could you handle a 15 to 30-year runway of no growth? How about if you were withdrawing assets? Most can’t, which is why many retirees need to have at least a portion of their assets invested to maintain lifestyle over the long haul in retirement.

An important task in the investing process is finding the appropriate level of risk to take.  The level of risk needs to be able to deliver plan success, but also needs to be one that you can live with (and not lose sleep over). Once that task is completed, the even harder job begins – sticking to your plan.

Sticking to your plan can prove to be easier said than done.  Many investors are still nursing some investment induced “Post Traumatic Stress Disorder” from the market gyrations of 2008-09, the dot com bust and the 3 years in a row the stock market was down from 2000-2002.

Through many discussions over the years we have found some investors were under diversified, which resulted in devastating losses equal to that of the market indices and sometimes even worse.  Understanding proper diversification and what protection it may provide, and what it cannot, is imperative. This can be an integral part of a successful retirement plan, because it helps give us the confidence to stay invested.

Even a well-diversified portfolio could probably go down if the stock market drops sharply, however, diversification may help mitigate risk depending on what’s inside. It is important to understand diversification and what to expect from your portfolio when facing volatility. It is also important to understand if volatility is affecting the ability of your long-term plans to be successful.   Fortunately, there are now financial planning programs that can help answer this question.

The confidence that an understanding of the markets and how/if it will affect your retirement plans may help you stick to your plan or make sensible changes to stay on track. It all starts with knowing thyself.

 The opinions expressed in this article are those of author and should not be construed as specific investment advice.  All information is believed to be from reliable sources, however, no representation is made to its completeness or accuracy. All economic and performance information is historical and not indicative of future results. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification cannot assure a profit or guarantee against a loss. Indices are unmanaged and do not incur fees. One cannot directly invest in an index. 
Fee-Based Planning offered through W3 Wealth Advisors, LLC – a State Registered Investment Advisor – Third Party Money Management offered through Valmark Advisers, Inc. a SEC Registered Investment Advisor – Securities offered through Valmark Securities, Inc. Member FINRA, SIPC – 130 Springside Drive, Suite 300 Akron, Ohio 44333-2431 * 1-800-765-5201 – W3 Wealth Management, LLC and W3 Wealth Advisors, LLC are separate entities from Valmark Securities, Inc. and Valmark Advisers, Inc. 

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