Episode 004: As a Retiree, Your Investment Strategy Needs to Balance Time and Risk! You’d think retiring with a big pile of money is pretty much the Golden Ticket to non-stop good times, but – spoiler alert – it turns out that spending strategically is also a thing. If we don’t? More and more people are living longer and, well, no one wants to outlive their bank balance. The goal here is to enjoy our bucket lists, maintain a healthy emergency fund and ultimately still have some inheritance left for relatives who were nice to us. It’s a complicated equation, which is why The Retirement Equals Freedom Podcast is here to help get it sorted out. Josh Bretl, CPA and owner of FSR Wealth Strategies, has focused this episode on the tricky business of investment management. In retirement the whole calculus in terms of time and risk has to change and too often financial planners don’t know how to adapt or serve their clients well in this next phase. We learn that free meals can be a great marketing tool, not only for drawing prospective clients but also – to Josh’s surprise – for educating people like trusty sidekick Dave Schmidt, who goes 2-for-2 on a little pop quiz. His fine arts degree didn’t exactly prepared him for crunching numbers, but we’re seeing an encouraging learning curve here (despite the disruptive slurping – with apologies to Dave’s mom). Join Josh and Dave next episode, when the focus shifts from income sources and investment management to the super-important topic of tax planning. Sound a little dry and confusing? You clearly haven’t experienced Josh’s “not boring” take on this topic. Dave promises: It’ll be a hoot. Let’s hold him to it … *Chapters:* 0:00 Josh's opening remarks 0:27 Dave introduces the episode 1:20 20 second dance party! 1:40 2 BFFs catching up on life 6:35 Let's talk about your investments as a retiree 14:28 Factor #1 = Time! 16:42 Did Dave just slurp his coffee during our podcast?! 17:26 Factor #2 = Risk! 21:30 Wrapping things up 24:13 30 second dance party! *Key Takeaways:* About investments (a topic that Dave admittedly finds a little scary): • Generally the one area in which most people have done some planning. • The goal is to accumulate money, which can be accomplished in various ways: 401ks; IRAs and Roth IRAs; SEP IRAs; Real estate; Cryptocurrency Financial advisors generally do a good job with helping people amass their nest egg, but a pretty terrible job as far as how to spend that money effectively in retirement. Why? Because they don’t understand how the investment philosophy has to switch. In retirement, financial planning must factor income and taxes into the equation – and it’s a lot more complex than the straightforward invest, invest, invest model. The paradigm shifts into learning how to spend that money. How you’re going to spend depends in part on: • Whether you plan to use all your assets. • How much you want to have set aside for emergencies. • How much you hope to leave to others as an inheritance. POP QUIZ: Does Dave remember the two biggest shifts in post-retirement thinking: *1. Time:* The frame of reference encompasses near-, medium- and long-term. *2. Risk:* Too many people are overly invested in the stock market, which despite recent history can be volatile and leave retirees vulnerable to precipitous loss. Other risk factors outside of the stock market: Tax risk, over-spending, living too long. Reality Check: People tend not to think they’re going to live as long as they in fact will, which – without proper planning – can stretch thin or burn through resources altogether. Next Episode: All about taxes and it’ll be “a hoot.” Josh and Dave promise! *Keep on keepin' on,* ~ Josh & Dave *Sign up for our page-turner of an email club!* *Visit episode 004's page on our website:* *Connect with the team:* #retirementequalsfreedom #retirementpodcast #retirementinvesting #joshbretl #daveschmidt FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this video have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this video. These views are as of the date of this publication and are subject to change. *Episode 004 originally launched to your favorite podcast app on May 12th, 2022* Topics covered in this episode are not topical, as we talk about more high-level things such as the mindset change needed to thrive in retirement....(read more)
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As a retiree, it is crucial to have a well-balanced investment strategy that considers both time and risk. After years of hard work, saving, and planning for retirement, it is important to ensure that your investments continue to work for you while minimizing financial risks. One of the key factors to consider as a retiree is time. Unlike when you were younger and had a longer time horizon for investing, you now have a shorter time frame to work with. This means that your investment strategy needs to take into account your current circumstances and goals. One approach to balancing time and risk is to focus on preserving the capital you have accumulated. Preservation of capital means being cautious with your investment choices and focusing on asset classes that are more stable and less likely to experience major fluctuations. This can help protect your retirement savings from significant losses. Another important aspect to consider is risk tolerance. Your risk tolerance may change as you transition into retirement. While you may have been comfortable with taking on more risk when you were working, your risk appetite may decrease as your primary source of income transitions from a steady paycheck to investments and savings. It is essential to reassess your risk tolerance and adjust your investment strategy accordingly. A popular investment strategy for retirees is diversification. Diversification involves spreading your investments across various asset classes such as stocks, bonds, and cash. The goal of diversification is to reduce the impact of market volatility on your portfolio. By diversifying your investments, you can achieve a better balance between risk and potential returns. While diversification can help mitigate risk, it is also important to regularly review and rebalance your portfolio. Market conditions and economic factors may cause your investment allocation to drift from your desired target. Rebalancing involves adjusting your portfolio to bring it back in line with your original plan. This ensures that your investments are properly allocated and aligned with your risk tolerance and financial goals. Additionally, as a retiree, it is crucial to have a contingency plan for unexpected events or emergencies. Maintaining an emergency fund separate from your investment portfolio can provide a safety net in case of unforeseen circumstances. This fund should be easily accessible and should cover at least three to six months of living expenses. Lastly, it is important to seek professional advice when tailoring your investment strategy. A financial advisor can provide valuable insights and guidance based on their expertise and knowledge of the market. They can help you navigate through the complexities of retirement planning, ensuring that your investment strategy aligns with your goals and risk tolerance. In conclusion, as a retiree, it is imperative to balance time and risk in your investment strategy. By focusing on preserving capital, reassessing your risk tolerance, diversifying your portfolio, reviewing and rebalancing regularly, maintaining an emergency fund, and seeking professional advice, you can ensure that your investments work for you in retirement while mitigating potential risks. Remember, it is never too late to make adjustments and optimize your investment strategy based on your changing circumstances and goals. https://inflationprotection.org/investment-strategy-for-retirees-achieving-the-optimal-balance-of-time-and-risk-004/?feed_id=123663&_unique_id=64cb26e99be82 #Inflation #Retirement #GoldIRA #Wealth #Investing #ira #retirementinvesting #taxes #SEPIRA #ira #retirementinvesting #taxes
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