April 16, 2025 • 27 mins
#SafeMoney #JonHeischmanSr #BalancedPortfolioRisk
In this episode, host Jon Heischman, Senior discusses how to balance your retirement portfolio to reduce risk.
Call Jon at (888) 426-0177 with questions, comments or to get a free copy of Top 10 IRA Mistakes and How to Avoid Tax Traps. Visit www.heischmanfs.com/ for additional information.
In this episode, host Jon Heischman, Senior discusses how to balance your retirement portfolio to reduce risk.
Call Jon at (888) 426-0177 with questions, comments or to get a free copy of Top 10 IRA Mistakes and How to Avoid Tax Traps. Visit www.heischmanfs.com/ for additional information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
People really don't know what their expenses will because they
don't know how long that they're going to live.
Speaker 2 (00:06):
The Americans are worried they won't have enough safe for retirement.
Now more than ever, retirement's going to cost for many
folks over a million dollars.
Speaker 3 (00:14):
He is no short thing in investing, but a lot
of people think that annuities may come close to that.
It's going to more safe, safe, safe, safe things that
they know.
Speaker 1 (00:22):
If they know they're going to need that money to
supplement the retirement, well then you can't play that rest.
Speaker 3 (00:27):
This is the Safe Money and Retirement Show. But John
Heischman Senior, Founder and partner of Heisman Financial Services serving
the Columbus and surrounding areas. John specializes in educating pre
retirees and retirees about safe money strategies and ideas. Now
is the Safe Money and Retirement Show. Here's John Heischman, Senior.
Speaker 2 (00:49):
Good morning, and welcome to the Safe Money and Retirement Show.
I'm your host, John Heischmann. Several weeks ago, my show
So focused on living past age ninety. I got quite
a response after that show aired. I think because it
(01:12):
made a lot of listeners realize there is potential to
live pastage ninety and we've got to plan for that.
That would have been the April fifth show, and if
you want to listen to that show, you can go
to my website and it will direct you to past
(01:37):
radio shows. That website is HEISCHMANNFS dot com h ei
sch m an FS dot com. That stands for Heishman
Financial Services. So visit my website and take a listen
(01:59):
to past shows. And as always, if there is a
particular subject that you would like to discuss with me,
or if you have any questions, we don't have to
meet in person. We can talk on the phone, so
let me know. Here's the number eight eight eight four
(02:21):
two six zero one seventy seven triple eight four two
six zero one seven seven. I like to receive your
questions and concerns, so let me know now if you
want to call me direct at my office, it's six
(02:44):
one four eight six one seven zero five to five.
I have a question. Can a retirement portfolio be too aggressive?
That depends on and that statement applies to retirement planning,
(03:06):
which is typically where you're past the accumulation stage. That's
the first stage of three. You've got the accumulation phase,
where you're working, you're contributing to your four to one
K and possibly your IRA. You're accumulating assets. You want
(03:31):
to be aggressive because you've got time. The next phase
is the preservation phase. You have built and accumulated retirement assets.
You're looking towards retirement, and you should be looking at
(03:54):
preserving these assets because you're going to go in two.
Phase three. I call that the distribution phase retirement income
required minimum distributions that you're going to have to take
(04:14):
from those qualified retirement accounts. So I don't want you
to be too aggressive in that preservation phase because it
could affect the distribution phase. And as I talked about
(04:35):
two weeks ago, if you live to age ninety or
past ninety, that income has to be there. Being aggressive
has the potential for higher returns, but also greater investment risk,
making those portfolios susceptible to market down turns approaching or
(05:02):
in retirement. I don't think your portfolio should be too
heavily weighted in aggressive stocks, especially nearing retirement. It's important
to review your portfolio to make sure you're in line
(05:24):
with your objectives and timeline. One option is to take
a look at rebalancing your investments and considering an annuity,
which can be a powerful tool to help stabilize and
(05:45):
potentially reduce a retirement portfolios over all risk. If you
have the right annuity, there is no risk. Annuities offer
options and get guarantees that make them popular with retirees
and investors nearing retirement. I think that's the big reason
(06:12):
for the substantial growth pretty much each year over the
last ten years. Not only are the guarantees attractive, but
the lifetime income benefit that can be included in that
(06:32):
annuity is huge. Another big advantage is they offer tax
deferred growth, which is really a plus for high net
worth individuals near retirement and in retirement who are most
(06:52):
likely in their peak earning period and tax paying years.
But you have to understand that no one size is
going to fit all solutions or situations. There's many types.
I mentioned guaranteed lifetime income that could be a fit,
(07:16):
which it is for many retirees. Others are interested in
the guarantee that there is no risk. The question is
how much are you going to earn or as I've
seen a combination of both. One very popular type of
(07:41):
an annuity is what we call a fixed annuity which
pays a guaranteed compound interest rate for a period of time.
I can give you a good example today there is
six percent compound interest guaranteed for three years. Of course,
(08:06):
this rate can change tomorrow or next week or next month,
which companies do. But I've seen this rate stay pretty
steady over the last month. And as mentioned, it's tax deferred,
and it is a great place to park money that
(08:26):
you don't need and you want to guarantees. They can
also be used for IRA money as well. Then after
three years you decide where you want to move the
money if the rate drops at that time. Another type
would be a variable annuity, which offer potentially higher returns
(08:54):
but also have risk. There's a menu of investment months
similar to a mutual fund, and income can be generated
from the variable annuity. You're going to have your indexed annuities,
which are going to fall somewhere between a fixed and
(09:18):
a variable as far as return with no risk, and
typically used from what we've seen for income using the
guaranteed lifetime income benefit. So if you delay taking the
income for let's say two years or five years, the
(09:42):
account can grow in value and the longer you wait
to start the income, the higher the income amount is
going to be. But the most important thing is to
make sure that an annuity is right for you and
what type is in your best interest for your situation.
(10:05):
There are many of the old annuities that are outdated
and haven't adjusted to change. So one option is to
review the annuity or annuities you have and to see
if combining them to a new one is in your
(10:28):
best interest. I can help you with that by doing
an annuity review, and also to talk about is that
right for you at this point in retirement or even
pre retirement A day eight four two six zero one
(10:50):
seven seven. That number again is triple eight four two
six zero one seventy seven. We also want to look
at your risk tolerance, comparing that to a portfolio that
might be too aggressive for your risk tolerance. Are you
(11:11):
in or approaching the preservation phase that I talked about
earlier and making sure that you can preserve enough of
your retirement savings to make sure it's going to give
you an income that you're going to need through retirement.
(11:32):
And I say income, I should say guaranteed income just
in case you live past age ninety. As always I
hope I've given you something to think about and to
take the necessary steps to make adjustments. I'm going to
take a short break at this point, so stay tuned
(11:56):
for the second part of The Safe Money and Retirement Show.
Speaker 1 (12:05):
Thanks for listening to The Safe Money and Retirement Show
with John Heischman. For more information, call one eight eight
eight or two six zero one seventy seven. That's one
eight eight eight or two six zero one seven to seven,
or visit their website at heischmanfs dot com more of
The Safe Money and Retirement Show. In a moment, you.
Speaker 2 (12:32):
Have spent your entire working life hoping what you put
into your retirement accounts will help you live comfortably when retirement.
Hope has no place in retirement planning. Hope can make
retirement feel like a looming problem instead of a rewarding
(12:55):
life stage. I don't want to operate under hope, especially today,
when longevity is at its highest. That's a good thing,
but it's a problem when we talk about retirement income.
You need a well executed plan. This is John Heischman
(13:19):
from The Safe Money and Retirement Show. I can help
if you'd like to schedule a telephone conversation or a
face to face meeting call a day eight four two
six zero one seven seven triple eight four two six
zero one seventy seven.
Speaker 1 (13:50):
Welcome back to the Safe Money and Retirement Show with
John Heissman. To contact John, the number to call is
one eight eight eight or two six zero one seven seven.
That's one eight eight eight or two six zero one
seven to seven. Once again, here's John Heischman.
Speaker 2 (14:07):
Welcome back to the Safe Money and Retirement Show. I'm
your host, John Heischmann. The first segment of the show
this morning, I was talking about how your portfolio was
balanced and how much risk is in that portfolio. And
I say portfolio, this is a combination of accounts that
(14:31):
you have that is going to provide you income during retirement.
And along that line, I want to review with you
a very important risk in retirement. It's called sequence of
(14:52):
returns risk. Many are thinking about risk lately, a especially
those that have just retired, because sequence of returns risk
becomes a danger as an individual takes withdrawals from a
(15:16):
particular account or multiple accounts. And when I say withdrawals,
this is for income. The order or sequence of annual
investment returns is a primary concern for retirees who are
living off the income and capital of those investments that
(15:42):
could be subject to sequence of returns risk. Earlier in
the show, I talked about annuities where the fixed annuity
and the indexed annuity does not have any risk, so
we don't have to worry about sequence of returns risk.
(16:05):
When we're discussing or if a retireee has those types
of annuities. Sequence of returns risk applies to those accounts
that you have, whether they're qualified or non qualified, that
have risk, because the danger comes when that retireee receives
(16:29):
lower or negative returns due to the withdrawals that they're
taking for income long term average returns in the timing
of taking those returns can impact not only future income
but the value of those accounts. Financial outcomes can be
(16:54):
dramatically different depending on when and how a return begins
to take withdrawals. Issues like the state of the market
and if it's a bull market or a bear market
are not under the control of the retiree. However, retirees
(17:18):
do have some opportunity to limit the down size risk.
I see a lot of those that are getting ready
to retire putting off retirement, working longer when there is volatility,
(17:39):
or planning with a worst case scenario regarding rates of return.
If you've delayed retirement and continuing to work, making contributions
to the retirement plan, whether it's an employer base plan
or maybe it's your own individual IRA, it can help
(18:03):
offset losses. Or it might be time to diversify away
from higher risk stocks, which obviously has a tendency to
fluctuate in value based on the state of the market.
It all comes back to having enough money coming in
(18:26):
to provide a consistent and guaranteed income during retirement. Remember
I talked about preservation, keeping the money that you accumulated
prior to retirement. Why does sequence of return risk matter?
(18:48):
Because the sequence of returns that you're getting may significantly
impact the income available during retirement. Two retirees with identical
wealth can have entirely different financial outcomes depending on the
(19:13):
state of the economy when they start retirement. Even if
the long term markets average are the same, incomes are
affected reduced during multiple years of a market downturn. Let
me give you an example. A retiree that's entering retirement
(19:38):
at the bottom of a bear market will see the
prices of their holdings in their portfolio rise when the
market recovers. More crucially, however, that retiree will also see
a reduction in the overall return of his portfolio because
(20:00):
of how much had to be withdrawn early in retirement
when prices were down. Plus, this retiree is essentially withdrawing
funds as his or her portfolio loses value. Consequently, that
retiree would have less shares of equities, which can benefit
(20:26):
from positive returns down the road. I don't want to
see any retiree have to adjust their income because they're
taking more out of their retirement accounts because there have
been multiple years, especially in the beginning of retirement, when
(20:51):
the market has been down. By contrast, someone who retires
when the stock prices are high early withdrawals of fewer
equities because they are worth more, will likely have a
higher overall portfolio return than the bear market retirey earns.
(21:14):
Why is this Well, it's because the bull market retiree
has more equities left in the portfolio, which can allow
this retiree to continue earning returns later in retirement, particularly
during a period of strong markets. Continuous strong markets where
(21:39):
you have growth keeps those income withdrawals strong and sets
you up for increasing your income later on in retirement.
You've probably heard somebody say in good markets that they
recovered their losses. If you have an account that's worth
(22:01):
one hundred thousand dollars and you lose twenty percent, now
that account has a value of eighty thousand dollars, then
there is a twenty percent gain. You've gotten your money back.
Right wrong, Because that twenty percent loss that took you
(22:24):
down to eighty thousand now gets a twenty percent gain.
It's twenty percent of eighty thousand, which now takes your
account to ninety six thousand. That twenty percent gain still
puts you at a four thousand dollars loss, or behind
(22:45):
where you were when it was one hundred thousand. Now,
let's say you're taking income from that account. With that scenario,
sequence of returns risk means what if you have two
or three years in a row, especially early in retirement,
(23:06):
are you going to recover? And if so, how long?
Because remember you're depending on this money for income. How
do we prevent this? Will very simply establish your income,
your guaranteed income first, then what's left over put it
(23:27):
in the market, keep that money in there for the
long term and hopefully benefit from the growth because it
could be additional income later on in retirement. So your
exposure to risk becomes very important. It needs to be addressed,
and I want to be able to help you determine
(23:52):
where you're at, how much income will your accounts generate,
and most importantly, will that income be guaranteed a day
ight eight four to two six zero one seven seven.
Once again, triple eight four to two six zero one
(24:14):
seven to seven. There's a couple of other risks that
a retiree needs to address. I have a list of
thirteen retirement risk and if you'd like a copy, just
call the number I give you. But your retirement plan
needs to address these risks. We've got the longevity risk,
(24:35):
which I talk about a lot, excess withdrawal risk. You're
drawing down too much income compared to the amount of
money that you have. Do you realize four percent four
and a half is the recommended withdrawal rate? What happens
(24:55):
when you're withdrawing eight to ten percent? There's a problem there.
Inflation risk, tax risk, market risk, or long term care
risk where a nursing home stay starts to drain all
assets and that can end up being a lot of money. So,
(25:17):
as I mentioned, we want to talk about these risks.
There are more than I just mentioned, but request your copy.
I'll send it out to you immediately. There's no cost,
absolutely no obligation eight eight eight four two six zero
one seven to seven. And keep in mind, retirement planning
(25:40):
involves so many different components, not just growing your money
or making money, and that's why it's so important to
cover the entire retirement income planning process. I'm glad that
you took the time to join me this morning, and
(26:02):
I hope that you have received some new and informative
information from me. Be sure to tune in next week
at the same time, same stations for the Safe Money
and Retirement Show.
Speaker 3 (26:21):
The Safe Money and Retirement Joe John Heisman Senior. To
get in touch with John, call one AA eight four
two six zero one seven seven. That's one triple eight
four two six zero one seven seven. For more information
about Heisman Financial Services, visit their website Heisman FS dot com.
(26:42):
That's h E I S C H M A n
F S dot com. Join us again next time for
the Safe Money and Retirement Show with John Heisman senior,
People really don't know what their expenses will because they
don't know how long that they're going to live.
Speaker 2 (00:06):
The Americans are worried they won't have enough safe for retirement.
Now more than ever, retirement's going to cost for many
folks over a million dollars.
Speaker 3 (00:14):
He is no short thing in investing, but a lot
of people think that annuities may come close to that.
It's going to more safe, safe, safe, safe things that
they know.
Speaker 1 (00:22):
If they know they're going to need that money to
supplement the retirement, well then you can't play that rest.
Speaker 3 (00:27):
This is the Safe Money and Retirement Show. But John
Heischman Senior, Founder and partner of Heisman Financial Services serving
the Columbus and surrounding areas. John specializes in educating pre
retirees and retirees about safe money strategies and ideas. Now
is the Safe Money and Retirement Show. Here's John Heischman, Senior.
Speaker 2 (00:49):
Good morning, and welcome to the Safe Money and Retirement Show.
I'm your host, John Heischmann. Several weeks ago, my show
So focused on living past age ninety. I got quite
a response after that show aired. I think because it
(01:12):
made a lot of listeners realize there is potential to
live pastage ninety and we've got to plan for that.
That would have been the April fifth show, and if
you want to listen to that show, you can go
to my website and it will direct you to past
(01:37):
radio shows. That website is HEISCHMANNFS dot com h ei
sch m an FS dot com. That stands for Heishman
Financial Services. So visit my website and take a listen
(01:59):
to past shows. And as always, if there is a
particular subject that you would like to discuss with me,
or if you have any questions, we don't have to
meet in person. We can talk on the phone, so
let me know. Here's the number eight eight eight four
(02:21):
two six zero one seventy seven triple eight four two
six zero one seven seven. I like to receive your
questions and concerns, so let me know now if you
want to call me direct at my office, it's six
(02:44):
one four eight six one seven zero five to five.
I have a question. Can a retirement portfolio be too aggressive?
That depends on and that statement applies to retirement planning,
(03:06):
which is typically where you're past the accumulation stage. That's
the first stage of three. You've got the accumulation phase,
where you're working, you're contributing to your four to one
K and possibly your IRA. You're accumulating assets. You want
(03:31):
to be aggressive because you've got time. The next phase
is the preservation phase. You have built and accumulated retirement assets.
You're looking towards retirement, and you should be looking at
(03:54):
preserving these assets because you're going to go in two.
Phase three. I call that the distribution phase retirement income
required minimum distributions that you're going to have to take
(04:14):
from those qualified retirement accounts. So I don't want you
to be too aggressive in that preservation phase because it
could affect the distribution phase. And as I talked about
(04:35):
two weeks ago, if you live to age ninety or
past ninety, that income has to be there. Being aggressive
has the potential for higher returns, but also greater investment risk,
making those portfolios susceptible to market down turns approaching or
(05:02):
in retirement. I don't think your portfolio should be too
heavily weighted in aggressive stocks, especially nearing retirement. It's important
to review your portfolio to make sure you're in line
(05:24):
with your objectives and timeline. One option is to take
a look at rebalancing your investments and considering an annuity,
which can be a powerful tool to help stabilize and
(05:45):
potentially reduce a retirement portfolios over all risk. If you
have the right annuity, there is no risk. Annuities offer
options and get guarantees that make them popular with retirees
and investors nearing retirement. I think that's the big reason
(06:12):
for the substantial growth pretty much each year over the
last ten years. Not only are the guarantees attractive, but
the lifetime income benefit that can be included in that
(06:32):
annuity is huge. Another big advantage is they offer tax
deferred growth, which is really a plus for high net
worth individuals near retirement and in retirement who are most
(06:52):
likely in their peak earning period and tax paying years.
But you have to understand that no one size is
going to fit all solutions or situations. There's many types.
I mentioned guaranteed lifetime income that could be a fit,
(07:16):
which it is for many retirees. Others are interested in
the guarantee that there is no risk. The question is
how much are you going to earn or as I've
seen a combination of both. One very popular type of
(07:41):
an annuity is what we call a fixed annuity which
pays a guaranteed compound interest rate for a period of time.
I can give you a good example today there is
six percent compound interest guaranteed for three years. Of course,
(08:06):
this rate can change tomorrow or next week or next month,
which companies do. But I've seen this rate stay pretty
steady over the last month. And as mentioned, it's tax deferred,
and it is a great place to park money that
(08:26):
you don't need and you want to guarantees. They can
also be used for IRA money as well. Then after
three years you decide where you want to move the
money if the rate drops at that time. Another type
would be a variable annuity, which offer potentially higher returns
(08:54):
but also have risk. There's a menu of investment months
similar to a mutual fund, and income can be generated
from the variable annuity. You're going to have your indexed annuities,
which are going to fall somewhere between a fixed and
(09:18):
a variable as far as return with no risk, and
typically used from what we've seen for income using the
guaranteed lifetime income benefit. So if you delay taking the
income for let's say two years or five years, the
(09:42):
account can grow in value and the longer you wait
to start the income, the higher the income amount is
going to be. But the most important thing is to
make sure that an annuity is right for you and
what type is in your best interest for your situation.
(10:05):
There are many of the old annuities that are outdated
and haven't adjusted to change. So one option is to
review the annuity or annuities you have and to see
if combining them to a new one is in your
(10:28):
best interest. I can help you with that by doing
an annuity review, and also to talk about is that
right for you at this point in retirement or even
pre retirement A day eight four two six zero one
(10:50):
seven seven. That number again is triple eight four two
six zero one seventy seven. We also want to look
at your risk tolerance, comparing that to a portfolio that
might be too aggressive for your risk tolerance. Are you
(11:11):
in or approaching the preservation phase that I talked about
earlier and making sure that you can preserve enough of
your retirement savings to make sure it's going to give
you an income that you're going to need through retirement.
(11:32):
And I say income, I should say guaranteed income just
in case you live past age ninety. As always I
hope I've given you something to think about and to
take the necessary steps to make adjustments. I'm going to
take a short break at this point, so stay tuned
(11:56):
for the second part of The Safe Money and Retirement Show.
Speaker 1 (12:05):
Thanks for listening to The Safe Money and Retirement Show
with John Heischman. For more information, call one eight eight
eight or two six zero one seventy seven. That's one
eight eight eight or two six zero one seven to seven,
or visit their website at heischmanfs dot com more of
The Safe Money and Retirement Show. In a moment, you.
Speaker 2 (12:32):
Have spent your entire working life hoping what you put
into your retirement accounts will help you live comfortably when retirement.
Hope has no place in retirement planning. Hope can make
retirement feel like a looming problem instead of a rewarding
(12:55):
life stage. I don't want to operate under hope, especially today,
when longevity is at its highest. That's a good thing,
but it's a problem when we talk about retirement income.
You need a well executed plan. This is John Heischman
(13:19):
from The Safe Money and Retirement Show. I can help
if you'd like to schedule a telephone conversation or a
face to face meeting call a day eight four two
six zero one seven seven triple eight four two six
zero one seventy seven.
Speaker 1 (13:50):
Welcome back to the Safe Money and Retirement Show with
John Heissman. To contact John, the number to call is
one eight eight eight or two six zero one seven seven.
That's one eight eight eight or two six zero one
seven to seven. Once again, here's John Heischman.
Speaker 2 (14:07):
Welcome back to the Safe Money and Retirement Show. I'm
your host, John Heischmann. The first segment of the show
this morning, I was talking about how your portfolio was
balanced and how much risk is in that portfolio. And
I say portfolio, this is a combination of accounts that
(14:31):
you have that is going to provide you income during retirement.
And along that line, I want to review with you
a very important risk in retirement. It's called sequence of
(14:52):
returns risk. Many are thinking about risk lately, a especially
those that have just retired, because sequence of returns risk
becomes a danger as an individual takes withdrawals from a
(15:16):
particular account or multiple accounts. And when I say withdrawals,
this is for income. The order or sequence of annual
investment returns is a primary concern for retirees who are
living off the income and capital of those investments that
(15:42):
could be subject to sequence of returns risk. Earlier in
the show, I talked about annuities where the fixed annuity
and the indexed annuity does not have any risk, so
we don't have to worry about sequence of returns risk.
(16:05):
When we're discussing or if a retireee has those types
of annuities. Sequence of returns risk applies to those accounts
that you have, whether they're qualified or non qualified, that
have risk, because the danger comes when that retireee receives
(16:29):
lower or negative returns due to the withdrawals that they're
taking for income long term average returns in the timing
of taking those returns can impact not only future income
but the value of those accounts. Financial outcomes can be
(16:54):
dramatically different depending on when and how a return begins
to take withdrawals. Issues like the state of the market
and if it's a bull market or a bear market
are not under the control of the retiree. However, retirees
(17:18):
do have some opportunity to limit the down size risk.
I see a lot of those that are getting ready
to retire putting off retirement, working longer when there is volatility,
(17:39):
or planning with a worst case scenario regarding rates of return.
If you've delayed retirement and continuing to work, making contributions
to the retirement plan, whether it's an employer base plan
or maybe it's your own individual IRA, it can help
(18:03):
offset losses. Or it might be time to diversify away
from higher risk stocks, which obviously has a tendency to
fluctuate in value based on the state of the market.
It all comes back to having enough money coming in
(18:26):
to provide a consistent and guaranteed income during retirement. Remember
I talked about preservation, keeping the money that you accumulated
prior to retirement. Why does sequence of return risk matter?
(18:48):
Because the sequence of returns that you're getting may significantly
impact the income available during retirement. Two retirees with identical
wealth can have entirely different financial outcomes depending on the
(19:13):
state of the economy when they start retirement. Even if
the long term markets average are the same, incomes are
affected reduced during multiple years of a market downturn. Let
me give you an example. A retiree that's entering retirement
(19:38):
at the bottom of a bear market will see the
prices of their holdings in their portfolio rise when the
market recovers. More crucially, however, that retiree will also see
a reduction in the overall return of his portfolio because
(20:00):
of how much had to be withdrawn early in retirement
when prices were down. Plus, this retiree is essentially withdrawing
funds as his or her portfolio loses value. Consequently, that
retiree would have less shares of equities, which can benefit
(20:26):
from positive returns down the road. I don't want to
see any retiree have to adjust their income because they're
taking more out of their retirement accounts because there have
been multiple years, especially in the beginning of retirement, when
(20:51):
the market has been down. By contrast, someone who retires
when the stock prices are high early withdrawals of fewer
equities because they are worth more, will likely have a
higher overall portfolio return than the bear market retirey earns.
(21:14):
Why is this Well, it's because the bull market retiree
has more equities left in the portfolio, which can allow
this retiree to continue earning returns later in retirement, particularly
during a period of strong markets. Continuous strong markets where
(21:39):
you have growth keeps those income withdrawals strong and sets
you up for increasing your income later on in retirement.
You've probably heard somebody say in good markets that they
recovered their losses. If you have an account that's worth
(22:01):
one hundred thousand dollars and you lose twenty percent, now
that account has a value of eighty thousand dollars, then
there is a twenty percent gain. You've gotten your money back.
Right wrong, Because that twenty percent loss that took you
(22:24):
down to eighty thousand now gets a twenty percent gain.
It's twenty percent of eighty thousand, which now takes your
account to ninety six thousand. That twenty percent gain still
puts you at a four thousand dollars loss, or behind
(22:45):
where you were when it was one hundred thousand. Now,
let's say you're taking income from that account. With that scenario,
sequence of returns risk means what if you have two
or three years in a row, especially early in retirement,
(23:06):
are you going to recover? And if so, how long?
Because remember you're depending on this money for income. How
do we prevent this? Will very simply establish your income,
your guaranteed income first, then what's left over put it
(23:27):
in the market, keep that money in there for the
long term and hopefully benefit from the growth because it
could be additional income later on in retirement. So your
exposure to risk becomes very important. It needs to be addressed,
and I want to be able to help you determine
(23:52):
where you're at, how much income will your accounts generate,
and most importantly, will that income be guaranteed a day
ight eight four to two six zero one seven seven.
Once again, triple eight four to two six zero one
(24:14):
seven to seven. There's a couple of other risks that
a retiree needs to address. I have a list of
thirteen retirement risk and if you'd like a copy, just
call the number I give you. But your retirement plan
needs to address these risks. We've got the longevity risk,
(24:35):
which I talk about a lot, excess withdrawal risk. You're
drawing down too much income compared to the amount of
money that you have. Do you realize four percent four
and a half is the recommended withdrawal rate? What happens
(24:55):
when you're withdrawing eight to ten percent? There's a problem there.
Inflation risk, tax risk, market risk, or long term care
risk where a nursing home stay starts to drain all
assets and that can end up being a lot of money. So,
(25:17):
as I mentioned, we want to talk about these risks.
There are more than I just mentioned, but request your copy.
I'll send it out to you immediately. There's no cost,
absolutely no obligation eight eight eight four two six zero
one seven to seven. And keep in mind, retirement planning
(25:40):
involves so many different components, not just growing your money
or making money, and that's why it's so important to
cover the entire retirement income planning process. I'm glad that
you took the time to join me this morning, and
(26:02):
I hope that you have received some new and informative
information from me. Be sure to tune in next week
at the same time, same stations for the Safe Money
and Retirement Show.
Speaker 3 (26:21):
The Safe Money and Retirement Joe John Heisman Senior. To
get in touch with John, call one AA eight four
two six zero one seven seven. That's one triple eight
four two six zero one seven seven. For more information
about Heisman Financial Services, visit their website Heisman FS dot com.
(26:42):
That's h E I S C H M A n
F S dot com. Join us again next time for
the Safe Money and Retirement Show with John Heisman senior,
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