Home Page
Annuities
Annuities
Annuities
Annuities
Tax Free Retirement Plans
Tax Free Retirement Plans
Tax Free Retirement Plans
Tax Free Retirement Plans
Social Security Benefits
Social Security Benefits
Social Security Benefits
Social Security Benefits
Lifetime Income
Lifetime Income
Lifetime Income
Lifetime Income
Life Insurance
Life Insurance
Life Insurance
Life Insurance
Header
Annuities Tax Free Retirement Social Security Benefits Lifetime Income Life Insurance



Lifetime Income:
Retirement Pitfalls And How To Plan For A Recession

Many retirement planners often follow the standard advice in the industry based on historical returns and planned draw downs rates, but the fact is, when you retire can make all the difference.

This time on the Financial Sense's Lifetime Income Series, Jim Puplava discussed some of the pitfalls of model assumptions and how investors can protect their nest eggs when downturns inevitably occur.

Timing Is Everything 

Historical models and drawdown rate projections are based on assumptions that may not hold out for every person in every retirement situation, Puplava noted.

Imagine if you retired in the year 2000. The stock market lost basically 49 percent, and then in 2002 the stock market went back up, until the fall of 2007, at which time it lost another 57 percent. It wasn't until April of 2013 that the S&P finally exceeded the old highs that were reached in March of 2000, Puplava stated.

"If you were invested in stocks between January 2000 and April 2013, your stock portfolio went essentially nowhere," Puplava noted.

Pitfalls of Ignoring the Short Term

If somebody says you can expect a certain amount of return over a historical period, it's crucial to consider that not all time periods are the same in the short term.

"Let's say you lose the average in a bear market … (around) 50 percent of your portfolio," Puplava said. "You need 100 percent return to break even again."

For those who panicked and sold in 2009, that loss became real. It's unlikely they got back in at March of 2009 at the bottom, or even the first couple of years of the bull market, Puplava stated.

One danger in this scenario becomes drawing down principle to maintain income levels. If you're selling assets in a declining market, you'll likely end up having to sell even more assets to maintain your.....

(Read More: https://seekingalpha.com/article/4026159-lifetime-income-retirement-pitfalls-plan-recession) 

Posted 2:55 PM  View Comments

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
Home Page About Us Get A Quote Contact Us Life Insurance Insurance Website Builder