Being Prepared Is Important
Are you prepared?
When our kids were babies, my wife always left the house prepared.
In fact, I often wondered how she seems to be ready for any situation.
Whether it was a runny nose or something more serious, she was always prepared.
Are you prepared?
Many looking toward retirement, and those already in retirement, seem to be unprepared.
They have been lead to believe their portfolio will always provide positive returns, and if the equities don’t, the bonds will do it instead.
To those comments I’ll often respond with, “Really? How is it going to work when equities are down 40% or more, and bonds have also dropped by maybe a third as much?”
I’ll often continue by asking about where the income will come from when both equities and fixed assets are down, and stay down for months and maybe years.
The standard approach of ‘just taking 4% off your portfolio in retirement and you’ll be okay’ should be suspect right now.
If the portfolio is half, it would require a withdraw of 8% to receive the same income on a 4% withdrawal when the portfolio wasn’t down.
Retirement, and investing for that matter, is about so much more than portfolio returns and withdrawal percentages.
There is a dynamic nature to investing and cash flow management, not to mention tax navigation of both.
You really need to be asking right now whether you are taking the standard approach, or personalizing your investments, income, and tax management around who you are, what you want, and what you in particular might need to do.
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“The future is what you decide to make it.”
– Barry H. Spencer