Some advisors will acknowledge that the markets can be unpredictable but they will then argue that the key to retirement success is diversification. Spreading your funds among small, mid and large-cap holdings along with a sprinkling of sector funds in combination with an international or emerging market exposure to start. Now add some fixed-income investments like bonds, mix well and there you have it, a recipe for retirement success! They will say that this approach should protect you from market gyrations and ensure your nest egg during retirement. Really? Maybe they weren’t around in 2008 when most everything decreased in value at the same time. Imagine how your portfolio would have fared had you also been taking an income stream.
The important question when it comes to your retirement is whether or not your nest egg is positioned so that it will generate enough income for you to maintain the lifestyle you want, an income that is guaranteed. The most pressing question asked of us is “Cy, do you think I have enough to last?” Retirement planning is not purely a matter of whether you have a big enough number. We’ve see people with large numbers run out of money before they ran out of time. The need to re-position a portion of your hard-earned assets into appropriate instruments that will generate sufficient income for you to live on, in both good times as well as bad, is critical. Traditional models using “systematic withdrawals” work well in markets that are going up, but can be devastating for retirees in markets that are going sideways or down. Ask about our S.W.A.N Technique. Those letters stand for Sleep Well At Night and when it comes to your retirement assets, isn’t that just what you want to do?