November 5, 2025 • 10 mins
“Hey Mike, I’ve managed my 401(k) my entire life; I just buy and hold index funds. Is retirement any different?”
Discover some of the risks associated with the idea that you can buy and hold your entire portfolio.
Text your questions to 913-363-1234.
Request Your Wealth Analysis by going to www.retireontime.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mike (00:05):
Welcome to how to retire on time, a show that answers
your retirement questions. Saygoodbye to that oversimplified
advice you've heard hundreds oftimes. This show is all about
getting into the nitty gritty.Now that said, remember, this is
just a show. It should not beconsidered financial advice.
As always, text your questionsto (913) 363-1234, and we'll
feature them on the show. Let'sbegin. Hey, Mike. I've managed
(00:28):
my four zero one k my entirelife. I just buy and hold index
funds.
Is retirement any different? Oh,boy. Alright. So let's dive into
this one. First thing tounderstand is when you are
growing your assets, whetherit's in the four zero one k and
the market on your own, in anIRA, or whatever it is, it is so
much easier to grow money thanit is to distribute or take
(00:51):
income in retirement.
Here's why. When markets aretough, it's to your advantage.
Because you're taking income,you're able to buy the dips, and
that grows, it enhances yourgrowth. It's a beautiful thing.
But when you retire, the gamechanges.
The sequence of the return isgoing to matter, and the market
(01:13):
cycles are going to matter. Andso you have to ask yourself, I
think the fundamental questionis, what don't I know that if I
did, would change my mind aboutthis? K? So first off, let's
just introduce something calleda flat market cycle. You may or
may not know this exists, but aflat market cycle is when the
equities market goes flat forover ten years.
(01:36):
Now just imagine, my entirelife, I buy and hold index
funds. That's code typically forstock focused funds or equity
funds. Is retirement anydifferent? Well, what if you
retired during a flat marketcycle and your equity or your
index funds made nothing forover ten years? You're probably
planning on taking income off ofthe growth.
(01:58):
So if there's no growth for overten years, one third of your
retirement or more, you'redipping into your principal.
You're sinking your ship. Justbecause the last ten to fifteen
years, the markets have onlygone up, doesn't mean they will
continue to go up. You need tobe aware of the flat market
cycle. The flat market cycle,for example, 2,000 for over ten
(02:18):
years, no actual returns pointto point, start to end.
1965, 1966, depending on whenyou start, over ten years, no
growth in the equities market,which is code for the stock
market. 1929, for over I thinkthat was, like, twenty years of
a flat market cycle. That wasthe Great Depression. Very
difficult situation. Nineteen osix, market was flat for over
(02:41):
ten years.
They called that the rich mancrash, because most people
weren't invested in the marketat that point. You need to
understand that's just one of Idon't know if you have real
estate in your portfolio too.It's around 62 risks that you
will have to manage and adjustalong the way. Are you okay with
that? Did you know, by the way,that you can have a sequence of
(03:04):
returns as in the sequence ofthe performance of the portfolio
at, let's say, around 5% versusseven and a half percent.
And you can actually get moremoney and have a more successful
retirement with a portfolioaveraging 5% instead of seven
and a half percent. And thereason is the volatility or the
swings, the ups and downs, aregoing to also affect your
(03:27):
overall return. Even though theaverages look nice, they may not
be as nice as you would think.So understanding how to navigate
that. The reason why I bringthis up is if you're not really
an investor, if you're notreally a trader, if most of your
life you just bought things andkind of ignored it and it worked
(03:48):
out, That's a wonderful thing.
But once you retire, you'replaying a completely different
game. Do not assume that becauseyou grew your money well, that
you're able to manage money inretirement well. Those are two
totally separate skills. Thinkof it this way. I know many
heart surgeons.
For whatever reason, I justhappen to meet a lot of heart
surgeons. They're brilliantindividuals. But I would never
(04:12):
have them do surgery on my foot,because my foot is a completely
different series of muscles, andbones, and mechanisms, whatever
the foot has. It doesn't makeone person smarter than the
other. It just means they'redifferent, and they need to be
managed differently.
And the reason why I say this,I'll give you a quick story. So
(04:35):
we had someone that he said hewas enthusiastic with the
market. He enjoyed the market,and all was well. We said,
great. We put together aportfolio, all was well, and one
of the stocks was basically asoft monopoly.
It was a very consistent longterm tried and true position.
Until one day, there was anannouncement, they lost their
competitive advantage, and ittanked like 15% in a day. And he
(04:58):
said, I know I could be doingthis, but that's just too much.
You guys were already there. Youhad already sold out of it.
You had already adjusted it. Ididn't. I was enjoying my
retirement, and then I cameback, and it was too late. I
don't want to be in this everysingle day. He then had the
foresight, the wisdom, to say,look, can you just manage it for
(05:19):
us?
Now, let's do the opposite ofthat. I've met many people where
their purpose in retirement,where they're connected, where
they're challengedintellectually, really comes
from their ability to wake up,and hit the market, hit the
news, and really make informeddecisions. And sometimes they
don't make a trade. Right?They're investors or traders.
(05:41):
And by the way, the differencein investors long term, a trader
is short term as a general rule,but still investors need to be
ready to make a decision at anymoment in case something
changes. My point being isthere's an emotional toll that
will be had if you decide tomanage your retirement on your
own. For some, that emotionaltoll is a positive. It's a
(06:03):
beneficial experience becausethey enjoy it, And for others,
it's very nasty. It's terrible.
So be weary of that. Are youaware of what you're saying yes
to and all the responsibilities,and are you not? Because the
reality is a growth portfolio inyour twenties, thirties, and
forties should look verydifferent than your retirement
(06:23):
portfolio, and then how youmanage it from an income plan
standpoint, from a tax planningstandpoint, from social security
optimization, all thesedifferent things. It's a lot
more difficult to just line itall up and then go. Now some
people, to their disadvantage,have saved up so much money that
they don't need to be prudentwith their investments.
(06:44):
But the problem with that, Ihave found, is they're basically
saying, I just wanna turn off mybrain, and we'll just let things
happen. That's kinda likesaying, I've got a good
metabolism, so I don't need tobe concerned about my health.
You ever met someone that'sskinny but very unhealthy? You
can't get out of these economicprinciples. You can't control
(07:05):
the market.
You can't control tax code. Andso if you're a good steward,
someone needs to be trained upand aware of how to manage the
portfolio, how to manage thetaxes, how to manage all these
different nuances, whether it'syou or someone else, but someone
needs to be overseeing it, andthey need to have previous
experience, because retirementis not the time to start
(07:26):
learning while maintaining fullresponsibility. It's a great
time if you're unaware to startlearning. Maybe five, six, seven
years into it, you're trained upenough that you understand the
responsibilities, and you'recomfortable with it. But don't
fall into the Dunning Krugereffect, which the Dunning Kruger
effect, it basicallyillustrates, and and look this
up on YouTube.
(07:47):
Very clever. It's why those wholack experience overestimate
their abilities. Too often, I'vehad people say, I wanna DIY my
retirement. I have no problemwith that until I say, what's
your investment history like?Are you in the markets?
Are you aware of how this works?How does this work? How does
that work? I just kind of poke alittle bit and figure out what's
(08:09):
their investment competence. Andwhen they say, I'm really
interested in it.
I wanna start learning now.That's a red flag. Please, pride
and greed are the downfall formany people, especially when it
comes to retirement planning.Find a system or a mentor,
someone that can help you getstarted at least for the first
(08:29):
couple of years, so that as youunderstand how the systems work
and what to do, then great. Youcan go off and manage it
yourself, and heck, I supportthat.
I was the one that wrote thatarticle, you may have seen it in
on Business Insider, that saidhow a comprehensive plan could
replace your adviser and saveyou money and fees. That is a
true statement, but you need toacknowledge the competence
(08:50):
that's needed to do thiscorrectly. That's all I ask.
Whether you work with us orsomeone else, don't take on more
than you can handle. Don't bitemore than you can chew.
Ask yourself, what don't I knowthat if I did would change my
decision? That kind of humilityis what saves people from
themselves making dumbdecisions, especially right now
(09:11):
as it seems like we're headedtowards a market top. And if we
are, and it's similar to a 2,000situation, just imagine you're
managing your retirement, andthe markets go down for the
first three years. It's down topto bottom 50%. You've lost half
your savings because you boughtindex funds and said, well, I'm
just gonna hold it for longterm.
It's not that simple. That's anoversimplified portfolio. You
(09:33):
need to have other strategiesready to go in place in case,
not if, but when that kind ofthing happens. That's all the
time we've got for the showtoday. If you enjoyed the show,
consider subscribing to itwherever you get your podcasts.
Just search for how to retire ontime. Discover if your portfolio
is built to weather flat marketcycles or if you're missing tax
(09:53):
minimization opportunities thatyou may not even know. Explore
strategies that may be able tohelp you lower your overall risk
while potentially increasingyour overall growth and
lifestyle flexibility. This isnot your ordinary financial
analysis. Learn more about YourWealth Analysis and what it
could do for you regardless ofyour age, asset, or target
retirement date, go toww.yourwealthanalysis.com today
(10:18):
to learn more and get started.
Welcome to how to retire on time, a show that answers
your retirement questions. Saygoodbye to that oversimplified
advice you've heard hundreds oftimes. This show is all about
getting into the nitty gritty.Now that said, remember, this is
just a show. It should not beconsidered financial advice.
As always, text your questionsto (913) 363-1234, and we'll
feature them on the show. Let'sbegin. Hey, Mike. I've managed
(00:28):
my four zero one k my entirelife. I just buy and hold index
funds.
Is retirement any different? Oh,boy. Alright. So let's dive into
this one. First thing tounderstand is when you are
growing your assets, whetherit's in the four zero one k and
the market on your own, in anIRA, or whatever it is, it is so
much easier to grow money thanit is to distribute or take
(00:51):
income in retirement.
Here's why. When markets aretough, it's to your advantage.
Because you're taking income,you're able to buy the dips, and
that grows, it enhances yourgrowth. It's a beautiful thing.
But when you retire, the gamechanges.
The sequence of the return isgoing to matter, and the market
(01:13):
cycles are going to matter. Andso you have to ask yourself, I
think the fundamental questionis, what don't I know that if I
did, would change my mind aboutthis? K? So first off, let's
just introduce something calleda flat market cycle. You may or
may not know this exists, but aflat market cycle is when the
equities market goes flat forover ten years.
(01:36):
Now just imagine, my entirelife, I buy and hold index
funds. That's code typically forstock focused funds or equity
funds. Is retirement anydifferent? Well, what if you
retired during a flat marketcycle and your equity or your
index funds made nothing forover ten years? You're probably
planning on taking income off ofthe growth.
(01:58):
So if there's no growth for overten years, one third of your
retirement or more, you'redipping into your principal.
You're sinking your ship. Justbecause the last ten to fifteen
years, the markets have onlygone up, doesn't mean they will
continue to go up. You need tobe aware of the flat market
cycle. The flat market cycle,for example, 2,000 for over ten
(02:18):
years, no actual returns pointto point, start to end.
1965, 1966, depending on whenyou start, over ten years, no
growth in the equities market,which is code for the stock
market. 1929, for over I thinkthat was, like, twenty years of
a flat market cycle. That wasthe Great Depression. Very
difficult situation. Nineteen osix, market was flat for over
(02:41):
ten years.
They called that the rich mancrash, because most people
weren't invested in the marketat that point. You need to
understand that's just one of Idon't know if you have real
estate in your portfolio too.It's around 62 risks that you
will have to manage and adjustalong the way. Are you okay with
that? Did you know, by the way,that you can have a sequence of
(03:04):
returns as in the sequence ofthe performance of the portfolio
at, let's say, around 5% versusseven and a half percent.
And you can actually get moremoney and have a more successful
retirement with a portfolioaveraging 5% instead of seven
and a half percent. And thereason is the volatility or the
swings, the ups and downs, aregoing to also affect your
(03:27):
overall return. Even though theaverages look nice, they may not
be as nice as you would think.So understanding how to navigate
that. The reason why I bringthis up is if you're not really
an investor, if you're notreally a trader, if most of your
life you just bought things andkind of ignored it and it worked
(03:48):
out, That's a wonderful thing.
But once you retire, you'replaying a completely different
game. Do not assume that becauseyou grew your money well, that
you're able to manage money inretirement well. Those are two
totally separate skills. Thinkof it this way. I know many
heart surgeons.
For whatever reason, I justhappen to meet a lot of heart
surgeons. They're brilliantindividuals. But I would never
(04:12):
have them do surgery on my foot,because my foot is a completely
different series of muscles, andbones, and mechanisms, whatever
the foot has. It doesn't makeone person smarter than the
other. It just means they'redifferent, and they need to be
managed differently.
And the reason why I say this,I'll give you a quick story. So
(04:35):
we had someone that he said hewas enthusiastic with the
market. He enjoyed the market,and all was well. We said,
great. We put together aportfolio, all was well, and one
of the stocks was basically asoft monopoly.
It was a very consistent longterm tried and true position.
Until one day, there was anannouncement, they lost their
competitive advantage, and ittanked like 15% in a day. And he
(04:58):
said, I know I could be doingthis, but that's just too much.
You guys were already there. Youhad already sold out of it.
You had already adjusted it. Ididn't. I was enjoying my
retirement, and then I cameback, and it was too late. I
don't want to be in this everysingle day. He then had the
foresight, the wisdom, to say,look, can you just manage it for
(05:19):
us?
Now, let's do the opposite ofthat. I've met many people where
their purpose in retirement,where they're connected, where
they're challengedintellectually, really comes
from their ability to wake up,and hit the market, hit the
news, and really make informeddecisions. And sometimes they
don't make a trade. Right?They're investors or traders.
(05:41):
And by the way, the differencein investors long term, a trader
is short term as a general rule,but still investors need to be
ready to make a decision at anymoment in case something
changes. My point being isthere's an emotional toll that
will be had if you decide tomanage your retirement on your
own. For some, that emotionaltoll is a positive. It's a
(06:03):
beneficial experience becausethey enjoy it, And for others,
it's very nasty. It's terrible.
So be weary of that. Are youaware of what you're saying yes
to and all the responsibilities,and are you not? Because the
reality is a growth portfolio inyour twenties, thirties, and
forties should look verydifferent than your retirement
(06:23):
portfolio, and then how youmanage it from an income plan
standpoint, from a tax planningstandpoint, from social security
optimization, all thesedifferent things. It's a lot
more difficult to just line itall up and then go. Now some
people, to their disadvantage,have saved up so much money that
they don't need to be prudentwith their investments.
(06:44):
But the problem with that, Ihave found, is they're basically
saying, I just wanna turn off mybrain, and we'll just let things
happen. That's kinda likesaying, I've got a good
metabolism, so I don't need tobe concerned about my health.
You ever met someone that'sskinny but very unhealthy? You
can't get out of these economicprinciples. You can't control
(07:05):
the market.
You can't control tax code. Andso if you're a good steward,
someone needs to be trained upand aware of how to manage the
portfolio, how to manage thetaxes, how to manage all these
different nuances, whether it'syou or someone else, but someone
needs to be overseeing it, andthey need to have previous
experience, because retirementis not the time to start
(07:26):
learning while maintaining fullresponsibility. It's a great
time if you're unaware to startlearning. Maybe five, six, seven
years into it, you're trained upenough that you understand the
responsibilities, and you'recomfortable with it. But don't
fall into the Dunning Krugereffect, which the Dunning Kruger
effect, it basicallyillustrates, and and look this
up on YouTube.
(07:47):
Very clever. It's why those wholack experience overestimate
their abilities. Too often, I'vehad people say, I wanna DIY my
retirement. I have no problemwith that until I say, what's
your investment history like?Are you in the markets?
Are you aware of how this works?How does this work? How does
that work? I just kind of poke alittle bit and figure out what's
(08:09):
their investment competence. Andwhen they say, I'm really
interested in it.
I wanna start learning now.That's a red flag. Please, pride
and greed are the downfall formany people, especially when it
comes to retirement planning.Find a system or a mentor,
someone that can help you getstarted at least for the first
(08:29):
couple of years, so that as youunderstand how the systems work
and what to do, then great. Youcan go off and manage it
yourself, and heck, I supportthat.
I was the one that wrote thatarticle, you may have seen it in
on Business Insider, that saidhow a comprehensive plan could
replace your adviser and saveyou money and fees. That is a
true statement, but you need toacknowledge the competence
(08:50):
that's needed to do thiscorrectly. That's all I ask.
Whether you work with us orsomeone else, don't take on more
than you can handle. Don't bitemore than you can chew.
Ask yourself, what don't I knowthat if I did would change my
decision? That kind of humilityis what saves people from
themselves making dumbdecisions, especially right now
(09:11):
as it seems like we're headedtowards a market top. And if we
are, and it's similar to a 2,000situation, just imagine you're
managing your retirement, andthe markets go down for the
first three years. It's down topto bottom 50%. You've lost half
your savings because you boughtindex funds and said, well, I'm
just gonna hold it for longterm.
It's not that simple. That's anoversimplified portfolio. You
(09:33):
need to have other strategiesready to go in place in case,
not if, but when that kind ofthing happens. That's all the
time we've got for the showtoday. If you enjoyed the show,
consider subscribing to itwherever you get your podcasts.
Just search for how to retire ontime. Discover if your portfolio
is built to weather flat marketcycles or if you're missing tax
(09:53):
minimization opportunities thatyou may not even know. Explore
strategies that may be able tohelp you lower your overall risk
while potentially increasingyour overall growth and
lifestyle flexibility. This isnot your ordinary financial
analysis. Learn more about YourWealth Analysis and what it
could do for you regardless ofyour age, asset, or target
retirement date, go toww.yourwealthanalysis.com today
(10:18):
to learn more and get started.
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