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Staying Invested THROUGH Your Retirement
- 2024/02/22
- 再生時間： 28 分
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あらすじ・解説
For most of us, we manage our investments with the goal of having a nice big nest egg when it's time to retire. But we need to continue to stay invested throughout our retirement. Often, investors are more afraid of running out of money than they are actually dying! Today Alex Cabot and Ed Lambert of Birch Run Financial discuss how to lower that risk.Ed points out that psychologically, investors experience more anxiety around market changes right before and after retirement. After all, the move from drawing income from a salary to drawing from investments is one of the biggest changes of your financial life. If you retire at 65, your median life expectancy in retirement is 20 years. And you have a 25% chance of living until age 90. How do you make your money last? You need a growth component to your portfolio. And while we plan for long-term market growth, we need to prepare for bumps in the road -things like the tech bubble bursting, the 2008 crisis, the "COVID Crash," and more. Moreover, inflation is built into our economy by design. We've seen a 2.4% core inflation rate over the last 20 years. If you extrapolate that forward, $10,000/month in living expenses today will be $18,000 in 25 years, or $20,000 in 30 years! You want to have enough income to live on, and in most cases, have something to pass down to your heirs.Alex speaks to the importance of diversification. With the help of Morningstar, he looked at several different theoretical $1,000,000 portfolios over the last 25 years. Assuming a 2.4% rate of inflation, and a $40,000 annual distribution (adjusted for inflation), here's what he found. That million dollar portfolio, counting inflation and distributions, would be worth the following today, 25 years later.Stock only: $908kBond only: $360k60% stock 40% bond $1.3MT-bills: $0Alex breaks down these numbers, and explains why the diversified portfolio outperformed anything else on the list.Here's the article on diversification Alex referenced on his LinkedIn in today's episode: https://www.linkedin.com/pulse/measuring-impact-portfolio-distributions-diversified-asset-cabot/ You can always email Alex and Ed at info@birchrunfinancial.com or give them a call at 484-395-2190.Or visit them on the web at https://www.birchrunfinancial.com/Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536 Any opinions are those of Ed Lambert and Alex Cabot and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. Stock Market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is ...