Are you worried about your retirement plan in the face of market volatility? As you approach or enter retirement, market swings can feel like a real threat to your financial security. In this video, Brent from Scottsdale Wealth Advisory reveals how to protect your retirement income (and your peace of mind) during unpredictable times.
You’ll learn:
- What sequence of returns risk is, and why it could sabotage your retirement if the market drops early on
- How cash reserves can act as a safety net during market downturns, so you’re never forced to sell investments at a loss
- The power of annuities in providing guaranteed income that isn’t affected by market movements
- How to structure your retirement plan with a combination of short-term security and long-term growth to ensure a stable future
Retirement is supposed to be your time to enjoy life, not worry about the next market crash. Don’t let market volatility derail your plans. Watch now to get the insight you need to make smart choices for your financial future!
If you’d like to talk through your own timeline and next steps, reach out to schedule a conversation at https://calendly.com/BrentMatthew or call us at (480) 247-9090.
Transcript
Hi, I’m Brent with Scottsdale Wealth Advisory. If you’re retired or getting close, you’ve probably asked yourself: What happens to my retirement plan if the market takes a hit?
It’s a fair question. When you’re no longer earning a paycheck, volatility feels different. You’re not just watching your portfolio rise and fall, you’re depending on it to pay the bills.
In this video, I want to share a few ways you can protect your plan from market swings without putting everything in cash. Let’s start with the biggest risk retirees face.
What Is Sequence of Returns Risk?
It’s called sequence of returns risk. That’s a fancy term, but the idea is simple: if the market drops early in your retirement, at the same time you’re starting to withdraw income, those losses can be much harder to recover from. Even if your average return looks good on paper, the order of returns matters. Losing money while you’re also taking withdrawals can shrink your account faster than you’d expect. So what can you do?
The Importance of Cash Reserves for Short-Term Needs
First, keep enough cash and liquid assets to cover short-term needs. This is the first bucket we talked about earlier in the series. Having 6 to 12 months of expenses in cash or cash equivalents gives you a cushion. It helps you avoid selling investments during a downturn just to pay the bills.
Building Reliable Income With Annuities
Second, build a reliable income stream that isn’t tied to the stock market. This is where annuities can help. A fixed or fixed-indexed annuity can provide guaranteed monthly income. No matter what the market is doing, that income can help cover your essentials like housing, groceries, and healthcare. When you have stable income in place, it’s easier to leave the rest of your portfolio alone and give it time to recover after a drop.
Investing for Long-Term Growth During Retirement
Third, keep some money invested for long-term growth. Even in retirement, you may need your money to last 20 or 30 years. That means you’ll still need some growth, but it should be growth you can afford to leave alone during volatile times. That’s why we structure retirement plans with purpose. Build buckets: one for short-term income, one for reliable mid-term income, and one for long-term growth. That way, volatility in one area doesn’t throw off your entire plan.
How to Respond to Market Volatility
You can’t control the market, but you can control how you respond to it. And the best time to plan for volatility is before it happens.
If you’re not sure whether your current retirement plan is built to handle a downturn, or if you’d like a second opinion, I’d be happy to walk through it with you.
Thanks for watching, and if you’ve made it through this video series, I hope it’s helped you feel more confident and more informed about your retirement.
