Retirement Planning: Can’t Be Fixed with Duct Tape

Main content

In order to prepare for retirement, experts advise creating a realistic spending plan. Okay, that’s pretty straightforward. Except of course, healthcare costs which seem about as easy to predict as next week’s Powerball numbers. Experts then advocate creating a winning drawdown strategy that will automatically cover your fixed retirement costs. This strategy must be mindful of market volatility because early drawdowns in down markets will disproportionately affect future income, interest rates which will affect bond values, tax changes which will figure into the optimal timing of asset liquidations and the time you expect to remain in retirement i.e. when are you going to die. Okay, while you are doing that, I’ll be in my garage rebuilding my car’s transmission and devising a plan to recycle used cat litter into environmentally friendly jet fuel. In addition to their own basic retirement needs, one in five Americans will be affected by a disability or special need and half of Americans will find themselves in the position as a caregiver. It’s okay to ask for help. You don’t have to be the smartest person in the room but it helps to know who the smartest person is and seek their guidance. Retirement income plans are even more complex than asset accumulation and are one of the only things that can’t be fixed with duct tape.

Please take a look at two extreme drawdown scenarios on page 91 of the Global Perspectives™ Book and reread the Global Perspectives guidance on the recent market volatility.

Footer content