By Randy Locklier, President and Chief Investment Officer, Gulf Financial
Here’s a list of things to keep an eye on if you are planning to ride off into the sunset soon.
1. Understand Sequence of Return Risk
Sequence of Returns Risk is a fancy term but what does it mean? Here’s the simple version: At some point during your 25-year retirement, there will be at least one bear market. Your finances will be much worse off if a market slump or crash occurs at the outset of retirement. The name of the game is to reduce risk and minimize principal withdrawals during a market downturn.
2. Delay Starting Social Security
Social Security is guaranteed income, indexed for inflation. That makes it extremely valuable. Mid 60’s is better than 62 for a start date. Tap other sources of retirement income before starting Social Security.
3. What is Your Healthcare Gameplan?
Americans are eligible to enroll in Medicare at age 65. There can even be penalties for failing to enroll on time. Make a plan to sign up in the months leading up to your 65th birthday. If you retire before age 65, you’ll also need to obtain health insurance on your own before Medicare kicks in. Can COBRA or the Affordable Care Act (ACT) insurance provide a bridge? Consider a Health Savings account to make your premium tax-deductible. Make a plan now before these choices are forced on you.
4. Consider Part-Time Work
Sometimes it’s a good idea to keep some income flowing. 27% of retirees work part-time and this helps with expenses and has the added benefit of increased mental acuity and longevity.
5. Pivot Investments from Growth to Asset Preservation and Income
Retirement is not the time for a lot of risk. Rather, consider it as a time to live off the interest and income your portfolio earns while maintaining a secure principal base. Find an advisor that specializes in lower-risk income portfolios when seeking professional investment help, always work with a Fiduciary Advisory that is bound by law to act in your best interest.
6. Get Professional Help
Now that it’s time to deal with Retirement Planning math or estate and tax planning it’s time to lean on others. I’d encourage everyone to consult a fee-only financial planner or accredited Financial Counselor simply because there are so many decisions to make. After all, you’ve never retired before, but an experienced advisor has guided many, many people through the process.
Here’s a great idea: reach out to Gulf Financial and schedule your free consultation today. It doesn’t cost a thing, and you will get actionable information tailored specifically to your needs.
Until then, from the Gulf Financial Family to yours, Happy New Year!
Visit www.gulffinancialgroup.com. Call (833) 403-4041.
