The most overlooked risk in retirement…


One of the biggest threats to your financial security in retirement is not even on most people’s radar.

The biggest threat we’re referring to is retiring during a downturn in the stock market.

It’s called “sequence of returns risk.

It sounds complicated, but it’s really not. Here’s how it works …

If the stock market is falling during the first few years of your retirement, the combination of stock market losses, coupled with the need to withdraw money to pay for retirement could literally decimate your nest egg.

And at this point, it would be very, very difficult to recover from these losses.

According to CNBC … “Retiring in a down market can mean two-thirds less money for the rest of your life.”

This quote from CNBC is based on a research study that compares two people retiring just two years apart. The first one retires during a down market. And the second retires during an up market. After 15 years, the one who retired in a down market had two-thirds less money than the other.

Suffice it to say that the stakes of retiring during a down market are very high.

The good news is there are a handful of strategies that could help you minimize its impact. But the key is to get in front of it long before you retire.

  1. If you don’t withdraw money or miscalculate your required minimum distributions, you could pay a 50% tax penalty — the steepest penalty issued by the IRS.
  2. You could also get pushed into a higher tax bracket. According to the Motley Fool, “the extra income is enough to push you into a higher tax bracket, and that can affect how much tax you pay on other sources of income.”
  3. RMD’s become even more dangerous because you could be forced to sell investments during a stock market downturn, or a bear market. This would lock in your losses and deplete your accounts even faster.

The key to successfully navigating RMD’s is to get in front of them in your early to mid 60’s. Because the longer you put it off, the fewer options you’ll have.

Check out the three different ways we could help you navigate required minimum distributions below.

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Whenever you’re ready, here are 3 ways we could help you navigate the sequence of returns risk in retirement.…

  1. Watch an on-demand, online discussion about different pillars of retirement planning. Click HERE.
  2. Please join us for one of our upcoming free, educational events about planning for retirement. Check out our next events HERE.
  3. To learn how you could navigate the sequence of returns risk for your specific situation, schedule a free analysis with one of our fiduciary advisors by calling (801) 682-1493.

 

Advisory services offered through B.O.S.S. Retirement Advisors, an SEC Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Please note that we are unable to accept any trade requests via email, voice message or text.

 

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