Clients were coming into my former firm and just not knowing what to do because every day we’d come into the office and the market was down again and down again and down again and maybe a bump up and then down again for the next 5 days. And it’s not just the fact that they were watching their accounts dwindle. I think S&P lost 56% over about an 18-month period, but it was the fact that many of them were taking money from those accounts. And as they’re taking money from those accounts and they’re losing money, they were in a position to probably never be able to recover.
MARK FRICKS
ATLANTA – The traditional rules of retirement planning have changed dramatically in recent decades, calling for new strategies to generate plans for reliable income regardless of market conditions. Increased market volatility since 2000 has rendered the old “4% rule” obsolete, now reduced to 2.8%, while tax implications, sequence of returns risk, and the shift from pensions to 401(k)s create additional challenges.
• Market volatility has increased significantly: 1980-1999 averaged 17.75% returns vs. just 6.06% from 2000-2020
• The 4% withdrawal rule has been reduced to 2.8%, which means larger portfolios are needed to generate the same income
• Withdrawing from market-based accounts during downturns locks in losses that may never recover
• Most 401(k) balances are pretax, meaning you must subtract 20-40% to account for taxes
• Creating a “bucket strategy” with different accounts for different purposes can provide stability
• Guaranteed income sources like properly structured annuities can replace the pension leg of retirement
• Consider using precious metals as “wealth insurance” that often performs well during market uncertainty
• Delay Social Security when possible in hopes of maximizing guaranteed lifetime income
• Work with a fiduciary who understands income planning, not just accumulation strategies
Call 770-980-9262 or visit masterplanretire.com to schedule a complimentary consultation to review your retirement income strategy.