A Retirement Plan Should Include A Retirement Income Strategy

A Retirement Plan is Not a Certainty

Many people believe their retirement plan is set in concrete and they can look forward to a retirement income calculated based on their retirement nest egg. This is an incredibly dangerous belief but is propagated by a wealth industry intent on convincing us nothing bad can happen.

Your Retirement Plan Should Protect Your Retirement IncomeRetirement Plan needs to include Protective Measures. In fact a retirement plan is just that – a plan. It can and will change as circumstances provide. Often the retirement plan may just need minor adjustment because of small changes in returns or tax rules or the recipients circumstances.

However when a financial crisis hits it is likely that unless the retirement
plans included defensive actions it has taken a big hit and you have had to
seriously review it.

It may be that with the stock market recovery your retirement plan is back on track. Good for you.

Once bitten, twice shy should apply here though. If you have got back much of what you lost four years ago, do you want to go through that again?

The financial industry will tell you everything is fine since you have
recovered much of what was lost. But what about the “opportunity cost” of not
having the money you lost working for you through this FED imposed bull market.

If you lost 30% of your Retirement Nest Egg then that is 30% that has not been working to grow your nest egg as it should have been.

So how do you protect yourself again large losses not just from the stock market but from other things such as inflation and fees and charges? These too can take big chunks of your nest egg and really mess up your retirement plan. What’s worse you may not even be aware it is happening.

A Retirement Plan should be under your control

Now I am back into blogging again I decided to review my e-book, “What Every Baby Boomer Should Know about Protecting their Nest Egg in Retirement”.

This post is partly a plug for my e-book In loveand partly to bring once again to people’s attention the timeless information in the
e-book. There is no time sensitive investment advice in the e-book. Just good common sense things you can and should do to ensure you can control your retirement plan and hopefully protect your retirement nest egg in the next major stock market down-turn.

Despite two year since I wrote the e-book NOTHING HAS CHANGED of any significance. Most of the financial players who were there through the crash are still there today and possibly even more powerful.

Let me ask you since the crash, “Has your financial planner helped you put in place a plan to limit your losses which might include:

  • Reducing your exposure to Risk-Based Assets if your nest egg is all you need and just need to maintain it?
  • Explained in detail how inflation can destroy your retirement plan over time and what you can do about it?
  • Fully disclosed all fees and charges to you including trading costs, postage for monthly performance reports, miscellaneous charges that they or the fund managers may charge to your retirement fund?
  • Discussed using options, stop losses, short sales and other ways to protect your retirement nest egg from the down-side risk in the event of another crash?

If you have recovered much of your retirement nest egg and NOT put in place some protective measures and educated yourself on what can destroy it, then chances are you will lose it again.

Just look at what has happened in the world today. Under our “Paper Money” system our governments have printed billions of dollars to refinance the financial institutions. They have purchased their bad debts and those bad debts have now been socialised with us taxpayers holding the debt. We own them.

When our Governments and Central Bankers all tell us we have to “We’ve got to spend our way out of this recession“, you have to wonder if the asylum is being run by the inmates.

Your retirement plan will fail once again if you do not educate yourself

I’m not talking about learning how to trade forex, the futures, CFDs or options. Let your financial advisers take care of those technicalities. You need to learn to ask the right questions and question everything. And put in place contingency plans that include protection to minimise stock market losses, inflation and hidden fees and charges at the very least. Otherwise it is not a
retirement plan, it is a prayer of hope.

The Retirement plan for my friend was seriously jeopardised after the crash. Read my post, “Baby Boomers Retirement Nest Egg Saga” for a wake-up call. The biggest danger now is complacency.

My e-book will help you do this:

Some of the things you will read in this book, or on the websites, or in the reports I mention will:

• Show you how much of your Nest Egg can be taken from you in Fees.
• Show you how some people in the Wealth Industry are using Flawed Retirement Calculators to provide you with overly optimistic pensions from your Nest Egg.
• Tell you why many of the mainstream Monte Carlo Simulations are not appropriate for use in calculating your Retirement Pension for the Long Term.
• Explain why you should always plan for a Worse Case scenario when creating your Retirement Plan.
• Know what the real maximum amount you can draw from your Retirement Funds is, at least in the early years.
• Understand the difference between Risk Assets and Non-Risk Assets and what percentage you should consider of each when implementing your Retirement Plan.
• Understand the need to avoid a significant loss and how hard it is to recover your lost capital when in Retirement.
• Know the Importance of Risk in maintaining your Retirement Plan against inflation.
• See how to structure your Retirement Plan to pay you if the Market declines for several years.
• Where to go for more details from the experts who understand all the topics listed above and some of whom have written extensively on them. Much of their information is given freely or at very low cost – but it is priceless.

Remember I researched much of the information for the e-book when I was trying to convince my financial planner that we needed to do far more than just create a retirement plan, invest and hope for the best. Especially since the bull market was statistically one of the longest in history and we were due for a correction instead we got massive wealth destruction.

Luckily I did not convince him of my concerns and the need to put some protective measures in place. I went to cash in November 2007 just before the crash occurred.

I still have my capital protected and and living off my returns with some part-time work in my own computers consultancy business. By luck more than good fortune my retirement plan is still intact.

Related Blogs

Leave a Reply

CommentLuv badge