What does the word safe actually mean when it comes to your retirement plan? That's what we're talking about on today's episode. Welcome, man. Thanks for joining us again. I'm Ben George with Jake Dozer, who is a certified financial planner, also a member of the advising team at Rosewood Wealth Management.
And we're talking about this term safe money with the markets as volatile as they are. I know everybody is kind of thinking about safety. How do I protect myself? This term safe money, though, Jake, I'm sure this has a number of different definitions, right? Oh, 100%.
You know, the word safe is pretty prickly in the financial advisory world.
Some financial advisors can't even use the word safe. At Rosewood, we can because we're what's called duly registered, meaning that we're both insurance licensed, life insurance, annuities, long-term care insurance, and more prominently, financial advisors, registered investment advisors is the technical term.
So we can use the word safe because in our context, safe means risk-free, which has to apply to things that are, you know, FDIC insured or insured by some sort of. Guarantee Association. The word safe shouldn't be used in the context of the investments. Although sometimes clients can use the term colloquially, like I want to know that something's safe in the sense that it's with a reputable company. We can't use it that way just because of formalities and because it can be misconstrued and weaponized.
But yeah, it can mean a lot of different things. You need clarity on what it means and what it should mean to you. And that's what we're hoping to provide in this video.
So I'm curious when somebody comes into the offices there at Rosewood Wealth Management, they say, Hey, Jake, I want my money to be safe. What do they typically mean when they're thinking that? Most of the time, and again, this is what folks are saying to us. Most of the time, when somebody means safe, they mean, I want to be confident that my money is in good hands. That's most of the time what they mean.
Sometimes it means I want my money risk-free, and that's sometimes a luxury that not everybody can have, right? If you've saved a tremendous amount of money or you spend very little, you can have the luxury of taking less risk and making the math work. But oftentimes, that's not the case for all of someone's money because you're either giving up liquidity with products like a CD where you can't access the money, or you're giving up return or a combination of the both with bank rates the way they are right now. You know, so you need clarity, you need to be able to quantify that. And it's important not only to get this definitionally, but it's important to be able to quantify it in the relationship that you're working with.
Because if your expectations are, I want my money to be safe. But you can't afford your money to be safe, then a hard conversation needs to be had, but a necessary conversation needs to be had.
So if your definition of success is, I wanna go to a financial advisor and say, I want A, B, C characteristics. and stick your hand out and have them hand it to you. You know, Rosewood actually might not be the right fit for you. And the reason is because our responsibility to you as fiduciary financial advisors, but also just ethically, is to say not just what you want, but what you need. You know, and so sometimes that means, hey, I know you don't want risk, but you need some risk to make this work.
And here's how we can do it in the most reasonable way. Right, so have that definition in mind, but then also have the conversation of where's the balance and tension between what you want and what you need. You know, a really good way of thinking about this is instead of asking what your risk tolerance is, meaning how much risk you can tolerate and not lose sleep at night, that's important. But a greater conversation for financial advisors is: what's your risk capacity? Which is effectively mathematically how much risk should you take to make your plan work?
These are, you know, again, I'm not telling you you should live in the, you know, textbooks all day long, but I'm telling you is that these are the types of conversations you need to have with your financial advisor: what do I need, not necessarily always want, to make this work?
Well, I'm curious when you're having these conversations with people about risk and risk tolerance, do they have a pretty good read on how much risk or we want to use that term safe, how much safety they have in their own portfolio? Almost never. Almost never does somebody actually have an accurate assessment of how much risk they're taking. Very often, people come in. Here's like the default throwaway answer: Yeah, you know, middle of the road.
You know, I'm uncomfortable. I'm moderate. I don't want to be super risky, but I don't want to be super conservative. That's a very common thing for us to hear. And then one of the things we do when we have like a retirement readiness phone call with folks is we say, okay, let's actually look at your investments.
You know, let's say you said, I want to be a five out of 10 for risk. I'm just using a frame of reference, scale of one to 10. Very often, especially in the past 10 years, we see you're more like a 7 or an 8 out of 10. Why is that?
Well, the stock market's been really, really kind until the past like 12 months. And so, there haven't been any like prolonged drawdowns or like losses in the market for a long time, since like 2008, really. They've all been pretty short-term. What that results in is that people get comfortable with risk and expect the market to always bounce back quickly. And so, very often, it's what's called a recency bias: well, I'm comfortable with more risk because I haven't felt the consequence of it recently.
Very rarely is it the opposite.
Nowadays, it doesn't mean that I don't see that. It's just most often people are taking more risks than they know they are. Than they actually want to, more risk than they need to make their plan work, and a lot more risk than they even realize.
So, that conversation now today and in 2026 is probably a little bit different than it was in five years ago in 2021, right? Coming off of COVID and the big pullback and a lot of the volatility there. I think people were pretty aware of the risk, probably at times in their portfolio, versus now, as you say, pretty comfortable with where the market's been. Absolutely. You know, 2020, in March of 2020 during COVID, the market was down 35%.
Now, nine months later, it was back to normal.
Well, that was almost so fast that it was hard for people to process how quickly and how much the market lost. And then 2021, the market had a gangbuster's great year. And so that's a little bit different because either A, people didn't realize it, or B, they were on the cusp of retiring and were like, holy cow, I'm so glad that didn't go sideways on me. And so people had a little bit of a healthier perspective on it, as opposed to right now, even this year in 2026 when we're recording. If I take you back to March of this year.
People were freaked out because the market was down like 12% in the month because that's when we entered this Iran conflict. And now, every other day, we're at peace with Iran, and then the next day, we're back to war with them. And so, people almost get like this callous. to the risk and the volatility, that's kind of unusual. But the reality is, is you kind of need to get, you don't kind of need, let me be more specific, let me be more emphatic.
You need an accurate assessment of how much risk you're taking and if it's aligned with how much risk you should be taking. What you feel like with risk is less important than how much risk you need. You need not too little to fall off the cliff and lose to inflation, not so much that you could lose too much and never recover, right?
So fear mongering isn't healthy either direction, but there are dangers on either side of the ditch. And you should get a sense of where your portfolio should be, not because of. Your investments alone, but what those investments mean to you. As you enter retirement, they are the way that you are going to replace your income for the rest of your life.
So the amount of risk is a lot more. Palpable. You can feel it a lot more now than when you were in 30. When you're 30, it's just like, all right, don't look at it. And as long as I'm not like freaking out, I'm okay.
Take as much risk as you can.
Well, risk is a means to an end now. When you're about to retire, risk is how much do I need to make this work and keep the income check going? It's a different relationship. You're withdrawing every month.
So you probably can't handle as much risk psychologically and financially as you did once. That should be common sense. But a lot of times, people need a little bit of a reality check with it. And that's what getting sort of a diagnostic under the hood examination should be all about.
Well, maybe a little example of this can kind of help kind of paint the picture of how you can get more safety into a portfolio. Can you think of anyone that maybe was allocated in a way that was way too risky before, and kind of what changed to help provide that safety in their portfolio?
So, yeah, I mean, this is a common thing where folks come in and they want an analysis on like, where am I at? And so we sit down for a visit and we determine, again, you know, hey, maybe you need to be a five out of 10. in order to make your dreams of retirement come true and you're an eight out of 10. And hey, here's the fund that you're in that's creating that risk, or maybe that concentration risk where you got too many eggs in one basket. And here's what we need to do in order to trim that back.
It doesn't mean we should stop taking risk, but we need to lessen your exposure to that specific investment or area. And instead, we need to increase safety. The most common example of us increasing safety is: how do we create as much return without risk or with limited risk? With certain sets of investments so that we can replicate your income even if the market's down.
So, here's a really good way to feel this: if you have to stop taking the dream vacation because the market's down this year. it probably means you're taking too much risk. Because you shouldn't have to stop your life to allow your investments to recover.
Now, there are exceptions to that. You know, 2008, the market's down 53% in the Great Recession. That might be an exception to the rule. But if the market's down 10, 15, 20%, and all of a sudden you have to put your plan on hold because you thought it was a little bit more exciting to take extra risk. above and beyond what you needed.
Well, now the cart's ahead of the horse. You're missing the forest for the trees because risk is a tool to accomplish your goals, not just to have a couple extra bucks. You know, it means something. It's not just a dollar on a spreadsheet. And that word safe means something different for everyone, right?
And if you want to make sure your money is actually safe, you don't want to just assume that. You want to take a close look at that. You can get that analysis, that evaluation with the team at Rosewood Wealth Management. All the contact information down below, whether you're watching on YouTube or listening on your favorite podcasting app, go find it there to make it easy. But take advantage of that and really evaluate how much risk you're taking, whether or not you are achieving that safety that you're looking for within your financial plan.
All right. Thanks for watching. We'll back again soon. Please subscribe. We'll talk to you again right here with Jake Dozer and John Stillman.
Carolina Wealth Stewards doing business as Rosewood Wealth Management is a registered investment advisor in the state of North Carolina. The material presented is intended to be general information and should not be construed by any consumer as the rendering of personalized investment advice.
