Planning your comfortable retirement when the future is UNCERTAIN…

It’s Tuesday 14th, 2022. The share market just go smacked by 345 points, nearly 5% in one day…

Oh. Em. Gee…

(That’s OMG or “Oh My God”, apparently)

You may be feeling like a million bandaids have been ripped off in one hit.

It hurts…BIG TIME…

And who knows if there is more to come…

If you’re on the verge of retirement or even 5 years away, the current uncertainty may be sending you into a tailspin.

You might be asking these questions:

#1 How do I protect my retirement nest egg from future economic and share market shocks?

#2 Is my retirement plan still on track?

#3 What changes should I be making now?

#4 Am I now at risk of running out of money?

These are the exact questions we’ve had clients asking as they approach retirement this year…

With the outlook bleak. Inflation and interest rate fears. Combine that with a share market bloodbath and it’s a scary proposition.

Particularly if you’re on the verge of retirement…

Sure you can try to avoid the media headlines, but that’s not going to help.

Here are three things you can do to achieve confidence in your retirement plan when faced with a tonne of uncertainty.

Focus on what you can control…

I know, you’ve most probably heard this a million times. Worrying about things you have absolutely no control over can end in disaster. It’s something we discuss with our clients almost yearly…

Clearly there are many things outside of your control. You only have to look at the last 20 years.

No one could have predicted the range of uncontrollable events. Unless you had a time machine…

Last time I looked, mine was broken…

Trying to predict the next uncontrollable event is a recipe for disaster.

Your best served focusing on the things within your control. Your mindset, the choices and ultimately the decisions you make.

Take Sam & Jo for instance. Planning on retiring this year.

A large part of our discussions centred around what needed to change with their current strategy. As they transitioned from work to retirement.

To avoid unexpected events derailing the payment of their monthly retirement income.

Do you have the right mindset to manage an uncertain future?

Prior to James & Emma coming to see us, there was no plan for what if scenario’s. What if the share market tanked when they retired, what then?

They thought they could continue with the same strategy as they had through their working life.

We worked with James & Emma to build in safety margins. Now they had a plan to still pay their monthly retirement income without worrying about investment market falls.

Have you included enough safety margin in my retirement plan to manage changes when economic conditions change?

When we met Harry & Felicity, they weren’t on the same page. Harry wanted to retire and had many plans relating to his interests. Felicity, however, didn’t want to finish cold turkey and thought she had a lot more to give.

We reassured Felicity this was okay as there are many couples that don’t retire at the same time. And some have different ideas about what they want out of retirement. That’s perfectly okay…

We worked with Harry & Felicity to build out their retirement roadmap. One that would allow Harry to spend time on his interests and for Felicity to trial part time retirement and go from there.

They’d both achieve what they wanted even though they were not retiring at the same time.

Are you on the same page as your partner when it comes to your retirement?

Want to discuss your retirement plans with Glenn?  Book a call here…

Protecting your retirement income…

As you approach retirement. Your approach needs to change from one of accumulation to decumulation.

Unfortunately, many approaching retirement think their current strategy will do them well leading into and through retirement.

Continue at your own peril…

Your focus needs to turn to securing your regular monthly income to fund your retirement lifestyle. How you do this is key to a successful retirement no matter what investment markets throw at you.

You need to make sure you have enough stacked away in your conservative part of your portfolio. Enough to make it through market downturns without robbing yourself of growth.

That’s the position John and Jeannie were in. Heading towards retirement as it had been on their mind for a number of years.

The problem was that if they continued on the same path. Should they experience market falls when they retire.

They’d be in danger of depleting their retirement savings at an accelerated rate. Putting their retirement lifestyle at risk.

Working with John & Jeannie, we worked with them to build what we call a “War Chest” to safeguard their retirement income in the event of market falls.

Enough in low risk investments that would see them through any market downturn. Allowing their growth investment time to recover…

How are you currently positioned if investment markets crashed when you retired?

You may also like, Scary Market Action Plan…

No matter when you retire, Murphy’s law says markets will decline when you need your money the most. So, you need to be prepared.

Your investment strategy needs to have enough flex in it to manage through choppy markets. Unfortunately many people we talk to are not positioned well for this…

Will your cashflow be flexible enough to manage through choppy markets?

Knowing your numbers is critical, if not vital to the success of your retirement.

Likewise testing your retirement numbers based on different withdrawal rates and investment assumptions is key.

Just like James and Sally who we recently worked with on their retirement plan. Planning on retiring this year in fact.

Keen to bring their retirement date forward. We tested their numbers based on different investment rates. Best case scenario and worst case scenario.

Providing James and Sally with the confidence they needed to make the decision to retire. No matter what investment markets are doing this year.

Have you tested your retirement numbers based on different withdrawal rates? What about different investment rates?

Want to discuss your decumulation strategy with Glenn?  Book a call here…

Get your PDF copy of ENOUGH? here…

Review your investment strategy…

Today’s retirement is definitely not set and forget.

Sadly another aspect of retirement planning that many don’t understand and get so wrong…

It’s a continual exercise of reviewing and re-testing risks against opportunities. The downside of getting it wrong include retiring later than you had expected or even worse, downsizing your lifestyle.

It’s heartbreaking when we see a potential client invest based on the strength of the market. Only to see that strategy fail them dearly when investment markets go against them.

As with every client we work with, other than knowing the numbers they need to hit. The second most important aspect is the return they need to achieve to make their retirement plan work.

Many that we see, like Jack & Danielle, were taking on more risk that they needed too. While in good times they look like superstars, we know that’s not going to last forever.

We worked with Jack and Danielle to determine the return they needed to achieve to make their retirement plan work.

It was a lot lower than they anticipated. Which meant they could de-risk their super investments.

So when share markets resemble stormy seas, their ride is much smoother.

Do you know the return you need to achieve so you don’t run out of money?

Sequencing risk is the biggest risk every soon to be retiree faces. We call it the danger period. Five years prior to retirement. Five year post retirement.

It’s the order in which returns occur…

Murphy’s law says it will happen when you retire. Something many are facing at this very moment as investment markets look more like a bloodbath.

Are you prepared for sequencing risk?

Many retain the same investment strategy as they had through their working years. This can be a BIG mistake if you don’t address it.

As you approach retirement. Your investment strategy needs to change. From one of accumulation to one of decumulation. It’s a different approach…

Have you asked yourself if you are positioned for decumulation in retirement?

The days of easy returns have ended. No longer can you just throw money at the market and expect to ride the gravy train.

The years ahead are going to be some of the most challenging you’re going to face. Returns are going to be lower. Which means you need to be more selective in the investments you make.

A lot of our clients have a preference for their investment portfolios to be adjusted based on the risk in investment markets.

This means when investment markets are expensive, profits are taken. When investment markets show value, risk levels are increased to take advantage of opportunities.

It’s a constant exercise of rebalancing risk based on opportunities and risks in investment markets.

Is your investment strategy up to date for current investment markets?

Planning one’s retirement is complex and fraught with danger…it doesn’t have to be that way…

Sure, you can be stunned like a deer in headlights…

Sure, you can stick your head in sand and procrastinate a few more years…

Or, you can be proactive and get a roadmap to set yourself up for a comfortable retirement once and for all.

All it takes is one short phone call with Glenn. We’ll help identify the GAPS in your current plans you’re unaware off and show you a proven roadmap to achieve your comfortable retirement with ease and more confidence.

Book a call here and we’ll provide some clarity and maybe a roadmap on how you can achieve a comfortable retirement with more confidence…

Glenn Doherty – CFP – Financial Planner | Helping people within 10 years of retirement achieve a successful retirement

We work with people in Adelaide and around Australia via virtual meetings!

Retirement Income Retirement Planning Uncategorized