You spend many years trying to save for retirement. During your 20's and 30's you are just starting out. Perhaps you married, paid down some school loans, while saving for that illusive down payment on your first home. If kids come along, a lot of your earnings went to raising them. A lot! During these years, your money is in the accumulation phase.
Just when you can finally start to buckle down, after college tuitions, weddings, and helping the kids get started, you realize you don't have a lot of time left to save more for your "planned" retirement date. Now you are getting near the distribution phase.
This is the time you need to consider being more conservative with your investment choices. Please realize, conservative does not necessarily mean guaranteed. It can be totally devastating to the longevity of your money if you take a hit from the market during the first few years of distributions. When you are drawing down during these periods it can become very difficult and sometimes impossible to recoup losses.
A strategy that may help is to build a foundation based on a guaranteed supplemental income stream (after Social Security and your pension, if you're on of the lucky ones that still gets one!). Once you have an income plan in place, then you can diversify according to your own risk tolerance. A word to the wise: being too conservative can be almost as dangerous as being too risky. You could very well outlive your money, earning today's meager returns once you factor in inflation and future tax increases.
I suggest having an analysis done on your current and future income needs. Be sure to cover the "what if"s like needing extra money for health care, or losing your spouse/partner. Then go and live your life!
For an independent audit and income analysis, give us a call. We want you to live the best life possible.
-Kathy
Family Focus Financial Group (732)364-5462 kathy@ffrgonline.com
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