Lately, I’ve been seeing some storm clouds on the horizon of our economy, and I want to warn everyone out there. If you haven’t acted, now’s the time to do it. Protect your retirement. Get the umbrellas out for the impending storm.
About 23 and a half years ago my parents retired in January of 1999. When they retired, they came to me for help. For many years now, I’ve been on my own, but at the time, I worked for a big company that taught us how to invest our clients’ money for retirement. The way they taught us was to build a diversified portfolio, which is about half stocks and half bonds, and then take out 4% income. I did what I was taught for my parents. I put them into a diversified portfolio, we took out 4% income, and the first year of their retirement in 1999 happened to be a good year for the market.
I will never forget for as long as I live, sitting at my parents’ kitchen table on December 26, the day after Christmas of 2002. If you don’t remember, the stock market crashed in 2000, we had 9/11 in 2001, and we had a recession in 2002. This was one of the lowest points of my professional career. I had to sit down at with my own parents and tell them that half of the money they had saved for retirement had vanished in the markets. I felt about an inch high, yet I had done everything I was supposed to do. That was the frustrating part; I did everything “right.”
I remember my mother looking at me and asking what that meant for them, and I had to tell her that the income they were taking from their portfolio to supplement their retirement had to be cut in half. She gave me a confused look and wanted to know for how long. I didn’t know. When I left their home, I promised myself I would find a better way. What the industry taught me was wrong. A good plan should not have to rely on the stock market to succeed.
Right retirement planning should be based on math and strategy, not on the markets. If the stock market doesn’t cooperate, and that leads to your retirement blowing up, you should not be left without a plan. You should still have hope. It broke my heart to have that conversation with my parents, and with other current clients. Every family that came to my office at the time was having the same problem. I could not accept that outcome then, and I never will.
I had to figure out a better way to do retirement planning for families who are already retired and for families that are close to retirement, who just saw their retirement dreams crash and burn in the 2000-2002 markets. That’s where I started my journey to find a better way.
This story is important, and I share it with you because I would argue that our current economic state is looking very similar to where we were in 1999 when my parents retired. The next two or three years might be tough and it’s more important now than ever, that you have your financial ducks in a row. If markets go well, I want you to win, but if markets go poorly, I still want you to win.
The financial industry doesn’t give a hoot if you win or not. The financial industry only cares about one thing: trying to figure out how much money they can make off you. They tell you to buy and hold because that’s how they make the most money from you. I think their way of doing things is wrong. I was raised in a middle-class household where we were instilled with a work ethic. You work hard to get ahead. You do the right thing even when others aren’t watching. I deeply believe that there are ways to create strategies to help you win the retirement game, even when markets don’t cooperate.
This is why we offer our Retire Right Report. Right is an acronym that stands for Risk, Income, Growth, Healthcare, and Taxes. Those are the five areas that are important to get right with your retirement planning. We’ve created a personalized report for you that shows you how you’re doing in those areas. We start by identifying your baseline. You can’t improve if you don’t know where you’re at already.
Around 90% of people that call to get this report have never had a baseline done. They’ve had advisors tell them how their investments are now and then they jump to how much better they can do. That’s not what this is. This is strategic planning where we start overlaying different strategies for you to help you understand the areas where you need a little work.
Now is the time to do this. The markets have collapsed for the first half of the year, and they’ve bounced back a little but don’t be surprised if things start going the other way again. I don’t want you to look back six months to a year from now and regret not taking advantage of this free opportunity. Let’s get this done and let’s get serious about your planning.
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