Case Study Part 3 – Enjoying Retirement

May 24, 2019
May 24, 2019 briankraus

Case Study Part 3 – Enjoying Retirement

Making Sure the Enjoyment Lasts

Carol has been retired for three years. She’s done some fun things in that time but, is now realizing that retirement is going to be a long road, and she may not have the means to afford to do all that she wishes. She also has some doubts about her current advisor relationship and is looking for a second opinion.

As part of her plan, we: 

  • Understood what fun things she had accomplished and what they meant to her. We also explored ways of finding the same joy without spending as much money.
  • Planned how an upcoming inheritance may change her financial picture and how that should be incorporated into her current financial plan.
  • Reviewed her investments and aligned them to her risk tolerance. We often find that many investors are unknowingly taking too much risk with their investments. We proposed an investment strategy that she understood and was more comfortable sticking with, regardless of stock market performance.
  • Discussed how she may be able to earn extra money by exploring her passion of teaching piano which would allow her not to have to rely on her investments as much.

The take away:

Most people need help planning their retirement and managing their investments. Remember, markets do go down at times too – no amount of planning will change that. Bear markets are an essential element of a never-ending market cycle. Investors can expect markets to drop 10 to 15% every 12 to 18 months and 20 to 30% every 5 to 6 years on average. So, one should expect about 8 bear markets over a 40-year working career and another 5 to 6 in a 25 to 30-year retirement. This is what markets do. If we embrace this from the beginning and go about managing the risk, focusing on goals instead of chasing the returns of VERY narrow market indices, all will be better off. At the end of the day, success in investing is more about discipline than it is about beating some index, picking hot stocks or timing the market.