4 Reasons to Protect Your Retirement from Losses in the Most Important 10-year Window

(don’t forget to checkout the video of this blog too)

We all know that the market goes up…

…and that the market comes back down.

As long as we are disciplined with our investment approach, this can work to our advantage.

It can help us grow our retirement assets and overall wealth very significantly over time.

But, there is a very important time to remove the possibility of losses from some of your portfolio.

This 10-year window is critical in protecting the assets that you will use to generate fixed, retirement income for yourself.

This critical window begins about 5 years prior to retirement…

And continues into the first 5-years of retirement.

Here are 4 reasons this protectionary window is so important:

✅ Losses Can Delay Your Retirement

A 50% loss requires a 100% gain just to get your portfolio back to even.

If you incur a large loss like this in the years leading up to retirement, you made not have enough for your portfolio to fully recover from that loss.

This could mean having to delay your retirement longer than anticipated!

✅ Sacrifice Your Discretionary (or fun) Money

It’s important to have enough fixed income to cover your fixed expenses in retirement.

But, if your portfolio suffers a large market loss it might put more of your 
“fun money” at risk.

So even though you may have enough to pay all of your bills…

You might have to severely limit your traveling, vacationing, and any other fun retirement activities you had planned on (which sounds like no fun to me)!

✅ Increase Chances of Running Out of Money

Market losses (especially early in retirement) put additional stress on your retirement portfolio.

This is often referred to as the sequence-of-return risk.

And it’s been mathematically shown to significantly increase your chances of running out of money in retirement.

That’s why it’s so important to protect some of your money from a large market losses (especially your retirement income) leading up to retirement (and in the first few years of retirement)‼️

✅ Protecting Your Portfolio Early in Retirement Gives Your More Growth Opportunity Later

Protecting your assets in this 10-year window opens up a lot of opportunities for growth later.

This means you can slowly start investing more aggressively in the later years of retirement…

Since the need to protect your portfolio for longevity diminishes over time.

Not only is it good risk management to protect your portfolio in this critical 10-year window, but it also still gives you opportunity for long-term growth and wealth-building.

This means you can protect yourself and ensure the longevity of your portfolio while also giving yourself a good opportunity to leave wealth to your loved ones as well.

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