You know from here and here that retirement plans aren’t worth a dime if they don’t change with the times—if they’re not dynamic. Planning for retirement and income drawdowns is what I do every day of the week. It’s part of my conversations with you. It’s why we talk, because change happens.
Look, we’ve been telling you for years now that you want to live below your means. You want to save until it hurts, work for as long as you can, consider part-time work in retirement, and pay attention to reality. Retirement income draw rates created in the mid-90s are about as relevant today as the reports they were printed out on. Those glossy reports may look nice, but they’re just not relevant anymore.
Unfortunately, there’s no shortage of financial engines spitting out projections that make you feel good. There’s no shortage of investment products making promises that may not come true. These reports create a false sense of security and give investors false hope. They’re comfort food when you need to eat your veggies. They create expectations that you’re going to be OK when that’s not a promise anyone should make. It’s a constant, daily battle. That’s a promise.
Pay attention to what’s going on around you. Projections made only a few months ago need to be adjusted and reviewed. You need to be able to keep up with the times. What does that mean? For one, if your portfolio is down, don’t put too much stress on it with an unrealistic drawdown rate. You need to be realistic.
Action Line: All those products that come with “guarantees” are selling promises about the future despite not knowing how it will play out. All they can really promise is that they hope it all works out. Will they be there for you in 10-years, or will they be on the beach? That’s not a strategy I’m comfortable with. Are you? Let’s keep in touch.
E.J. Smith - Your Survival Guy
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