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Entering retirement marks a major shift from being active in the workforce to relying on your investments. With the extreme market volatility we're experiencing, you might be afraid to go through such a monumental change.

It’s worse for those of us who already stepped into retirement and don’t want to take up a sie job. While it’s easier said than done, the volatile market shouldn’t dictate when you retire, or your comfort in retirement.

In this episode, you’ll discover how to deal with market volatility and find peace in retirement, even when the markets are uncertain. Plus, a few extra steps you can take to lower risk and retire more confidently.

Listen now!

Show Highlights Include:

  • How to deal with market volatility in retirement if you can’t return to the workforce (03:51)
  • How “stress-testing” for unexpected events helps you to prepare your budget and gives you peace of mind (05:38)
  • The number one mistake people make when it comes to financial planning (and how to avoid it) (06:53)
  • How to weed through the emotion-provoking news and figure out what truly matters in your life (instead of watching the news all day and getting anxious) (09:16)

Thinking about what your typical week in retirement will look like? Download our Ideal Week in Retirement planner.

Read Full Transcript

Want to finally stop working and retire in peace. It's about more than quitting work and living off your savings in retirement reimagined. You'll discover how to have a fulfilled retirement that lets you enjoy travel, family time and freedom. And now here are your hosts. Ron Bernstein and Nicole Sullivan.

(00:24): Hello and welcome to the retirement reimagined podcast. My name is Nicole Sullivan. I'm a financial planner and the co-founder and director of financial planning at prism planning partners. And today I'm joined by my wonderful partner, Ron Bernstein. Hi Ron. Hi Nicole. How are you? I'm doing great. Happy Thursday. You as well, finishing up the week on a strong note here. I love it.

(00:50): An emotionally strong note. I would say it's been an interesting week in the markets for sure. Yeah, it's an interesting year and I think an interesting year for sure. It'll be interesting to see how the markets are doing when this episode actually goes live. Uh, today is June 16th and there's just been a lot of volatility and turmoil thus far, And it comes with the territory. I know it's been a long time and memories run, uh, really shallow in situations like this, but do you look out historically we've had market conditions like this in many cases worse.

(01:24): So let's jump in. I know this is a very, very hot topic on many people's minds. I really wanna address some of the concerns that maybe our retiree listeners may have or soon to be. Retirees are markets that are volatile bad for a retirement. That is the question of the day. That's a great question. And I think if you ask the retiree out there, they would probably say yes, but hopefully we can maybe not Des debunk a myth, but make them feel a little more at ease about being in a retirement situation and having to endure a lot of the, the heartache of, of watching their asset values and their statements start to go down.

(02:03): so Ron, maybe let's start off by talking about what's been going on in this situation in 2022. Why are markets reacting as badly and volatil as they have been
In its simplest terms, it really always comes down to what goes up normally has to come down. And, and we got ahead of our skis a little bit in the pandemic period, there was a lot of artificial stimulation put into the market through, uh, different policies that were going on, both from the fed, uh, who was artificially keeping interest rates low and, and pumping up the money supply through bond purchases. And then you couple that with Congress and building out all this stimulus through fiscal, uh, handwring where they did a lot of, I put a lot of money in the hands of people during the pandemic, hoping that they would use this in a very logical way while the pandemic ran, ran its course, but it may have just gotten a little out of control,

(03:01): A little bit of overcorrection That's correct. Saying right. And the markets values went up accordingly just because demand was way, uh, far exceeding us supply. And we had constraints on the supply side and it just was a perfect storm for correction, which is now translating into, uh, by definition of bear Market. And I think as well, when you throw in some of the Russia and Ukraine activity as well, just kind of true shocks to the system, things that were unexpected and not really controllable, that just adds fuel to the fire. Correct. So now we've, we're here. Now it's a question of making some sense of it and create some connection of how it is dealing, how people have to deal with this in their finances on a personal level.

(03:51): Let's maybe talk a little bit how we coach some of our clients in retirement on how to deal with volatile situations like this. It can be extremely concerning to someone who is maybe in their sixties, seventies, even older, who doesn't have the ability to return to the workforce. They probably have some semblance of guaranteed income streams, be it social security or a pension, or maybe annuity income, something like that. But it does seem as though many folks rely on their portfolios, their investment income to help supplement a retirement, if not fully fund a retirement. So Ron, what are some of the tips that we're sharing? And I can obviously add my own thoughts on this too.

(04:37): Yeah. And I'd love to get your thoughts. I think first and foremost, as we've always said, it's crucial to have a plan and I'm not just trying to put a plug in for that, but you have to have a deep sense of your spending both on a mandatory side and on the discretionary. And you need to basically also reevaluate various assumptions, mostly on inflation because inflation is probably the most toxic topic that we can describe here because it eats right into your purchasing power and it's compounding too, which could be very damaging over time.

(05:08): And I think that, I know there's this saying that the trend is your friend. I think when it comes to planning for retirement, there's very long term trends that are your friend, but the short term trends even gosh of the past 10 years are not your friends. And you need to be investing based on decades and decades of history and not just looking at the short or intermediate term when making decisions for a multi-decade retirement.

(05:38): And we haven't even scratched the surface life events that can occur. And I know we would be remiss by not saying health events occur along the way, and you need to properly prepare for those. So those are those emergencies that very often can get overlooked. But if you can get ahead of it and identify what those are early on, you can certainly bake those into any plan that you have With all of our clients. We always test stress test for a long term care event, and we tend to go more extreme, be it in duration and cost than the typical long term care event, just to provide that peace of mind to our clients,

(06:17): Right? That is a very essential, essential component because the late life issues and we've discussed in a previous podcast and spending trends that occur over the course of a 20 to 30 year retirement and healthcare is usually that last leg that comes online probably at the most inopportune time. One thing that I think it could really create some friction is if you have any legacy pursuits know, because those can get thrown out out the, uh, with the bath water, you know, next generations who may have thought that there could be something there for them now are having to reassess themselves. So it's a lose lose pretty much for everybody.

(06:53): So it's really important to have a plan in place, convey those desires and wishes to maybe someone helping you construct a plan. But the other thing that's important is to act on this plan. And this is something that we see all the time, not all the time, but we have seen with sometimes new clients who come to us, they say, oh, I had this thought or that thought, or I worked with another planner before or whatever it is, but I just haven't been able to put this plan in place. And can you help me hold my hand and make sure that I'm actually doing these things that I, I wanna set out to do. My favorite phrase to people is if you don't act on your financial plan, you've just bought yourself a very expensive paperweight.

(07:34): And you may wanna even take a step back from that as well. And, um, have someone who you can discuss goals and objectives with, because you have to understand exactly what the end game is and what you're striving for. And if you haven't articulated that there's really no plan out there. That's really gonna get you there without a clear set or a blueprint around what it is you're looking to achieve. And it's hard sometimes to have these conversations, just you and your spouse, because money is so emotional and goals can even be really emotional and, and maybe you and your spouse potentially need help getting on the same page. And that's why I just really think our relationships and conversations with clients are so valuable because we're providing a forum where you can talk about your hopes and dreams and how you're going to position your resources to appropriately obviously, account for what you need to use for supporting yourself for the rest of your life, but also what you want to do with your golden years.

(08:32): And it comes really of value, especially during these times of market volatility, where you're seeing some fluctuation, your investments, and it is unsettling for a lot of folks and having somebody out there who's got the benefit of experience and truly understands exactly what you've got going on and being able to deal with worst case scenarios around maybe a prolonged market downturn. And once again, we won't get in the specifics regarding strategies and, and how to protect against it, but they're out there. It's always a great conversation to have with folks, uh, cuz there's nothing better when you go through a period like we are experiencing right now with a degree of civility being just feeling as though you you're safe and, and, and nothing bad is gonna happen to you Here cutting through the static.

(09:16): That's right. Just another point I wanted to make while we're kind of on this note, the news media of today is so constant. It is so emotion provoking. Everybody wants clicks. Everybody wants eyeballs and on their content. And I just think having an objective third party with experience who can help you cut through the noise, make sense of it and stick with your plan is just so valuable. Especially once you're retired. Some of these TV shows, especially really just prey on your emotions and hype things up and, and it's just not always necessary. And Then having an objective voice to, to speak on those subjects with is very helpful. And in times such as weight, like I said, we're experiencing right now is, is a critical component about having a successful retirement. So I think this is just appropriate topic for the times right now.

(10:05): I think as we move through this volatile period, we do want to just offer our support and empathy because maybe your investments weren't positioned appropriately and you're feeling some of the heat. It's really tough to have to make decisions on. Should I do this or that with my investments? Have I been getting the right advice and the right guidance? And so if there's ever anything we can do to help you, please just let us know because it can be, it can be really tough, especially once you've settled in a retirement and kind of have assumed a certain lifestyle only for those plans to potentially be upended Agree wholeheartedly. Yep.

(10:40): Right. So once again, Ron wanted to thank you so much for your time and your insights today. They are so valuable as always. I appreciate it, Nicole, and I appreciate you. And, and I I'm just gonna leave everyone up one last thought this, this too shall pass it. It's always a prelude to better things Ahead. And so for all of our listeners out there real quick, I did want to remind you that we have a wonderful website full of content and more retirement related topics. Our website is prism planning, partners.com. We have a blog, we have an ebook download other downloads that you might be able to use certain activities like the weekend retirement planner. So what I'd like to encourage all of you to do is just check out our website. If these topics are of interest to you and as well, if you have any questions, comments, or concerns, Ron and I are always happy to talk to you. I'll make sure to include our contact information in the show notes. Once again, Ron, thank you so much. Thank you. No, Nicole. And we'll talk again soon. Take care. Bye. I know. Bye bye. Now

(11:56): This program is brought to you by the podcast factory.com.

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