Retiring in San Diego: Sequence of Returns
When planning for retirement, it is important to factor in the concept of sequence of returns. In San Diego, given the very high cost of living and with retirees living on fixed incomes, this concept is especially important to grasp.
At the outset, we need to make clear that two fundamental goals for retirement are protecting the savings and building on top of it. Once you retire and are out of the workforce, you will likely take more money out of your savings than you put in. For this reason, those planning for retirement must prepare for this circumstance to avoid wiping out their savings. Life generally can be unpredictable, and this is also true of the financial markets.
The sequence of returns will impact your savings during your retirement years when the market will be volatile and you are withdrawing from your savings to cover expenses. If the market experiences a drastic downturn, the amount of your savings may fall much faster than you expected, potentially leaving you vulnerable in later years when you still have expenses. Your expenses may even rise due to unforeseen events such as medical problems or emergencies.
Those planning for retirement must take into account that the market may take a drastic or prolonged downturn, including during the early years of retirement, and must be prepared for that outcome so that they will have sufficient savings in later years. A licensed financial planner can help retirees weather the financial storm of their retirement years.
In San Diego, Jason Groth of Safe Harbor Solutions will help guide those planning for retirement to prepare for a volatile market. With his experience, he will offer a personalized strategy to protect the wealth of clients. Importantly, he will break these concepts down in a way that his clients can easily understand.
Watch the whiteboard video below to see how the sequence of returns can impact you.
At the outset, we need to make clear that two fundamental goals for retirement are protecting the savings and building on top of it. Once you retire and are out of the workforce, you will likely take more money out of your savings than you put in. For this reason, those planning for retirement must prepare for this circumstance to avoid wiping out their savings. Life generally can be unpredictable, and this is also true of the financial markets.
The sequence of returns will impact your savings during your retirement years when the market will be volatile and you are withdrawing from your savings to cover expenses. If the market experiences a drastic downturn, the amount of your savings may fall much faster than you expected, potentially leaving you vulnerable in later years when you still have expenses. Your expenses may even rise due to unforeseen events such as medical problems or emergencies.
Those planning for retirement must take into account that the market may take a drastic or prolonged downturn, including during the early years of retirement, and must be prepared for that outcome so that they will have sufficient savings in later years. A licensed financial planner can help retirees weather the financial storm of their retirement years.
In San Diego, Jason Groth of Safe Harbor Solutions will help guide those planning for retirement to prepare for a volatile market. With his experience, he will offer a personalized strategy to protect the wealth of clients. Importantly, he will break these concepts down in a way that his clients can easily understand.
Watch the whiteboard video below to see how the sequence of returns can impact you.
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