Often, seniors are surprised to discover—with newfound knowledge—they would have never invested in the financial product they bought for their current portfolios and retirement income plans. Hindsight is always 20/20. When it comes down to it, it’s all about the timing of your retirement and how much you plan to withdraw from your retirement accounts and preparing against the risk of the sequence of returns. The sequence of returns is the risk of receiving lower or negative returns in a period when withdrawals are made from an individual’s underlying investments. Like life, there are ups as well as downs. The sequence of returns may be responsible for many retirees running out of money because they didn’t understand withdrawal rates in volatile markets. Watch the interview on mitigating the sequence of returns with Investment Advisor Representative Eric Judy. http://rightonthemoneyshow.com/navigating-risk-tolerance-in-retirement-is-no-small-maneuver-eric-judy/
No one can control the rate environment they retire into, which leads you to wonder: where will your retirement income come from? It can come from many sources, such as:
https://www.youtube.com/watch?v=z6ydfEEcYVc&feature=youtu.be
But how do you get the timing just right to mitigate your risk? Once a person reaches retirement age, the sequence of return risk can be significant during the retiree’s distribution years. It could potentially jeopardize a portion of your principal investment base. But, with the right strategy in place, combined with your Social Security benefits, you at least have a shot at successfully mitigate the impact of negative returns during retirement. One possible consideration is purchasing a guaranteed lifetime income annuity to mitigate the sequence of returns risk and establish predictable income.