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Trevor's Weekly Market Reviews

Trevor's Weekly Market Reviews

| June 24, 2020

Will you earn money by working an income-paying job in retirement?  The statistic found in Notable Number 1 in this week’s Weekly Market Review states that the majority of those surveyed are open to the idea.  We talk to our clients a lot about achieving a “work optional” lifestyle.  Being able to financially make the decision to work or not sounds pretty amazing to most of us who still have to work.  Even if you love what you do, most people also love the idea of not having to do it for forever.  While some people, like my grandfather who was a home builder, choose to work as long as their mind and body allow them to do so.  I think most all of them would tell you they continue to work because they want to, not because they have to.

To achieve this “work optional” lifestyle at a reasonable age, you need a solid financial game plan that includes a portfolio that can pay you, if and when, you choose to stop earning that paycheck.  There are several changes that should be made to a portfolio to help pivot from an emphasis on growth to a priority on the income the investments can generate.  There can be many challenges that come with a retirement income plan.  Over any lengthy retirement, a challenge you will almost certainly face is “Sequence of Returns Risk.”  While scary and potentially very damaging to a portfolio’s value, Sequence of Returns Risk can be managed with a plan.  I have provided an example of the portfolio damage that can be done if this risk isn’t managed.  As you will see this risk, like several others, is unique to the distribution phase of a portfolio.

On a brighter note, while it feels like it has been summer since March when the kids stop going to school, last Saturday officially welcomed summer on the calendar.  I hope that despite all that challenges our world faces right now that you and your loved ones have an amazing 2020 summer!

As always, we hope you find the Weekly Market Review both interesting and informative.

Click HERE for the Sequence of Returns Risk

Click HERE for the Weekly Market Review

Trevor N. Coe, CFP®