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5 Retirement Investing Mistakes to Avoid

Planning Matters Radio / Peter Richon
The Truth Network Radio
December 30, 2023 10:00 am

5 Retirement Investing Mistakes to Avoid

Planning Matters Radio / Peter Richon

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December 30, 2023 10:00 am

A financially secure and happy retirement doesn't just happen; it takes planning and some modifications as you get older. In this video, Peter with Richon Planning and Erin Kennedy walk through some mistakes:

  1. Not Having a Plan
  2.  Forgetting about Inflation
  3.  Not Creating any Tax-Free Income
  4.  Investing too Conservatively
  5. Taking on too much Risk as You near Retirement

If you'd like to speak with a fiduciary advisor about creating a financial plan that is uniquely tailored to your financial goals, please give Peter a call at (919) 300-5886 or set up a complimentary consultation by visiting

  #Retirement #WealthManagement #RetirermentMistakes #Investing


Welcome back everyone.

Peter, good to see you. We are talking through today five retirement investing mistakes that we all need to avoid. A financially secure and happier retirement doesn't just happen, it takes planning and of course some modifications as time goes on.

So we're going to walk through some mistakes. The first mistake is not having a plan. This is essential when it comes to addressing retirees' number one fear, running out of money in retirement.

Absolutely. You've got to have a plan in place and so many of us have good tools, have even done a good job in being proactive in saving and investing, have a reasonable amount of money saved. But do you have the plan in place that's going to show you how to generate income and make sure that that income is dependable, sustainable, and give you that confidence into and throughout retirement? If I had a hammer and a drill and I came and said let me build your house, I have these awesome tools, you probably would still want to see a blueprint. And a lot of people have good tools, the 401ks, the IRAs, the investment accounts, but they are not a plan.

Those tools do not constitute the blueprint for retirement. You really need to sit down, look at how all of the pieces come together. How are you going to optimize social security? What's the order of operations for creating income?

Where do you do that from first, second, last, efficiently? How do you minimize and control taxes? What about the what ifs and the variables? Plans for the future are based on some assumptions and a lot of people's assumptions are overly optimistic that the market's always going to produce this high positive rate of return, the taxes are going to stay the same, that nothing's ever going to go wrong essentially.

Well Murphy's law is what happens to plans and life and so make sure that you're making those assumptions that you do so in a way if you're wrong about the assumptions that you're making that you end up in a better situation than you expected, not a worse one. And too many people don't have the plan at all and where they do have the plan they are too optimistic in some of the assumptions that their life, their financial future depends on. Right and that segues perfectly into our second mistake Peter, forgetting about inflation. Right yeah a lot of plans, a lot of projections kind of assume that life is going to cost about the same in 10, 15, 20 years. Think about 15, 20 years ago and how much things cost then or even two years ago right? I mean you go to the grocery store per your chart here in the graphic yeah you're getting a lot less bang for your buck in everything and that is going to continue to happen in the future. Retirement is in the future, it is going to be more expensive and by the way it's not only the items that we pay for today that are going to get more expensive but if I think back 15 or 20 years there are a lot of things that were not in my budget at all that I've added to the budget.

The cell phone bill, identity theft protection, how many different streaming services and apps have been added to my budget that were not things I even thought about 15, 20 years ago. That is also going to continue to happen into the future so we've got to plan and account for some amount of increasing income and increasing expenses into and throughout retirement. Third, not working now to create tax-free income in retirement. Yeah I think that there is a tremendous value in having some pool some part of your assets where taxes have already been paid and you know I think that there is something to be said for paying that bill while you have a paycheck with which to pay it. Now you need to crunch the numbers here it's not universal and maybe not for every dollar but I certainly find that it's easier to pay it while you're earning a paycheck than on day one of retirement you have a finite amount of money. You have an unknown amount of time you've got to make that money last and taxes are going to be likely one of our largest at least our largest known expense into and throughout retirement. There is nothing that says that taxes go away once we retire.

That takes strategic planning. If you want to control and manage taxes you've got to do so and too many people look at that lump sum on day one of retirement but forget I call it the gross planning mistake forget that that is a gross number and that they've got to account for the IRS and the tax bill and the department of revenue before they even get to spend a dollar that they withdraw from those retirement accounts. So don't forget to think about taxation and where possible build up some tax-free pool of assets for yourself to draw from because it can help in a number of ways.

Social security, it can help with your Medicare because that's means tested, Irma, having some Roth money, having some tax-free money, having some after-tax money to complement and supplement your tax deferred retirement nest eggs certainly can be of benefit and value. Right and just to remind everybody we are living in historically low tax rates right now. Indeed we are and they are slated to change into the near future. Tax law already on the books means that taxes could go up will go up if nothing's done to change it in 2026. Next mistake investing to conservatively if we have a long time horizon stocks still deliver the best long-term results. Yeah and I think this is about time optimizing your portfolio. If you've got transactions that you're going to be making this month or next month you don't take a whole lot of risk with that money and in fact any kind of short-term expenditures one to five years I would not put a whole lot of risk on that money on on what you are saving intending to be there when you want or need to make that purchase and you should always have that emergency account in place because things come up in life again Murphy's law but much more than about five to ten years and we need to have some growth on that money maybe then we're skewing toward the moderate or moderately conservative end of the investment spectrum and and anything really 10 years or beyond now we're hopefully comfortable taking a little bit more risk because we don't need that money today so maybe with those dollars 10 years or more into the future that's more on the moderate to even moderately aggressive end of the spectrum otherwise we are losing out to inflation and losing money safely because interest even though it's better than it was two years ago it is still not truly keeping up with inflation or growing the purchasing power on your dollars on the other hand though as we near retirement we can't be taking on too much risk right and and I think that this is where unfortunately there have been life and retirement altering circumstances for retirees from a force that is outside of any of our individual control large market downturns if the money that you need to live on in other words liquidate from your account savings and investments in the next one to five years is at risk and the market takes a precipitous drop that can impact the entire trajectory of your retirement now you're liquidating dollars that you did not intend to need to liquidate four or five 10 15 years into the future and you're liquidating a larger percentage of your portfolio value locking in losses which we never want to do and removing those dollars ability to recover when the market does turn around so we need to have a time optimized portfolio we need to have now money we need to have available money we need to have more long-term money but we need to understand in retirement the reality is that most people are net sellers of assets in order to create the income that they need and so we don't want those assets to be exposed to large amounts of risk if we know we're going to need it in the near future and not give them time to recover right glad we got to talk through these mistakes some we just forget about it's important to have that reminder but if anybody has questions peter how can they get a hold of you yeah feel free to give us a call we do put together the optimized retirement plan for individuals for folks for couples no cost no obligation this is an outline of your plan looking at income investments taxes health care and legacy and and we go that far in the process with no cost no obligation to you and then decide if there are things that we can do to help make that plan happen and put it in place along with you so if you'd like to take advantage of that getting that written document the optimized retirement plan give us a call 919-300-5886 919-300-5886 or you can go online is what it looks like it's my last name rashan but it's rashan you can email me peter at rashan all right peter thank you it is always a pleasure aaron thank you everyone peter rashan here hope you enjoy the content as always make sure that you like subscribe share the videos with others that may find this information helpful and as always you're welcome to be in touch or to submit questions or comments you can comment below the video anything that you'd like to see or hear shared on our youtube channel and in future videos if you got a topic that you've been thinking about or is of concern for you financially be sure to let us know we'd love to help you by discussing it on the channel so appreciate the continued views and the likes and the subscribes the shares the comments always helpful we look forward to getting you the information that you need this has been planning matters radio the content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy you are encouraged to seek investment tax or legal advice from an independent professional advisor any investments and or investment strategies mentioned involve risk including the possible loss principle advisory services offered through brooks own capital management a registered investment advisor fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation
Whisper: medium.en / 2023-12-30 12:17:16 / 2023-12-30 12:21:38 / 4

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