The Retirement Dilemma
How Do We Invest Our Retirement Assets With Interest Rates Near Zero and the Stock Market Near Record Highs?
So, here’s what traditional financial planning from Wall Street doesn’t get: We Boomers are pretty nervous about retirement, more precisely we are very unsure about STAYING retired! Boomers are the first generation to see the retirement at the end of the great 401K experiment, and, frankly, the jury is still out on how we’ll succeed at managing our resources through retirement. Many of us are choosing to defer retirement, and some of us have given up on the idea altogether.
After 30 years in the financial services industry, I have been on the frontline of this battle, watching friends navigate the maze of financial advisors, banks, internet investment firms, insurance agents, and friendly advice from the next barstool as we all try to figure out what to do with our retirement assets. We remember the financial crisis of 1987, 1994, 2001, and 2008 like they were yesterday, and we wonder, what are we supposed to do if the financial markets freak out again when we are older and past the option of going back to work?
On the other hand, interest rates are closer to zero, so putting our money in traditional savings vehicles like bank insured deposits doesn’t seem like a great option either. As a result of the 2008 financial crisis, the Fed has flooded our financial system with money, lowering interest rates and leaving savers in the lurch. With no reward for saving our money, many of us are forced to invest our money, and investing comes with all kinds of risk, so it’s no wonder that so many of us are so nervous about making that crucial retirement decision.
In my new book, The Retirement Dilemma, now available on Amazon, I discuss these issues in more detail and I introduce the Bins and Gaps approach to retirement planning. The Bins and Gaps approach compares your fixed retirement income (Social Security and other pensions) to your projected retirement budget and helps to identify your monthly spending Gaps. We then translate this monthly Gap to a lifetime Gap, using your life expectancy (we use age 100). In my practice, we recommend that you invest your funds in Bins that correspond to the appropriate investment strategy for the rest of your life, broken into 5 year increments. By taking this segmented approach to retirement I believe that you can retain the flexibility to change to market conditions and interest rates as you get older.
If you’d like to learn more about this strategy, pick up a copy of my book on Amazon, or give me a call (or an E Mail) to talk about your retirement. Our proprietary comprehensive retirement plan utilizes the Bins and Gaps Strategy to illustrate your retirement and provide a roadmap to, hopefully, give you the confidence to retire.
If you have some time, take a look at my Retirement Time Website by clicking the button, you'll find looks of good information about pursuing retirement income. When combined with our risk management of portfolios, you'll find that retirement might just be within your grasp!
No strategy assures success or protects against loss.