The Biggest Mistake Made By Retirees

The biggest mistake retirees make is NOT transitioning from accumulation growth strategies to distributions income strategies once they reach retirement age.

I’m not talking about a balanced portfolio of moving from high risk to low-risk type investments. I am talking about products that shift from risk to NO risk and provide guarantees.

We’ve all seen the commercials with the tag line “What’s your number?” The idea of this advertisement is to get you to think about how much you will need to save before retirement to support your lifestyle through your retirement. However, that’s only half the question. They never address the other half.

Here lies the problem – what if after you retire you lose half of “Your Number” due to negative market performance like the one we saw in 2008? Are you willing to go back to work or wait several years to recover your losses before you start using your money again? That’s crazy! So “What’s Your Number” is only half the question.

So if you’re using a risk-based investment strategy prior to your retirement and unless you are willing to change your investment strategy after you reach your number, then “What’s Your Number” is a misleading representation of its purpose.

Here’s the challenge; most of us go through life accepting what we are told so long as it seems reasonable and doesn’t take too much effort to try and understand. Unfortunately, this is the attitude adopted by so many of us when it comes to our investments.

What we are told and by whom can be the difference to your retirement survival. So get the facts. I always ask the question “If something you thought were true today actually turned out not to be true, when would you want to know?” 

By spending a little bit of time educating yourself, you can make a critical difference in your financial well being in retirement.

In my practice, I tout Fixed Indexed Annuities as being the product that is best suited to protect you once you reach “Your Number.” Fixed Index Annuities allow you to continue to grow your savings at reasonable rates, keep your money liquid, and provide income guarantees so that you can’t outlive your income generated by “Your Number” once you’ve reached it.

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