This past week, I was in Hilton Head recording a segment for WHHI News and we were discussing the current situation of our economy and the stress retirees feel. During the segment, I referenced a quote attributed to Will Rogers: “When you find yourself in a hole, the first step to get out is to stop digging”. Unfortunately, this is the present situation for many retirees.
I have received phone calls or emails on more than one occasion where the client has told me that they wished they had implemented the income plans I recommended. They now face the challenge of providing income based on a lower asset base. Because of fear, many have moved to cash to wait out the storm. History tells us that this may be a longer storm than expected, and many will do the opposite of what Rogers recommends and keep digging. The reason for this is that the need for income is still there. It does not go away when the market drops. The longer it takes for the market to recover, the smaller the asset base becomes to recover. There is an alternative.
First, create the income you need NOW! This is the most important step. Next, find a vehicle for your money that resets every year. This allows you to grow your asset base from a higher number. Finally, find one that could exceed inflation in the future. These products exist, but the most important step is to create the income you need. This way, you are not impacted by market events and your budget must only worry about inflation and taxes. By the way, I work to solve these challenges too. Now is the best time to deal with taxes. If you want to learn more, just schedule an appointment with my assistant Morgan. Call (828)559-0299 or email us at morgan.wylie@retirerm.com.
It is time to enjoy retirement and not spend it worrying about what the market will do next.