Football Season is Over….Retirement Lessons Still Important

football on green turf

If you are nearing retirement or recently retired, you are in the football equivalent of the “red zone”. The decisions you make, and the possible investment results that can occur in this period have a wildly outsized impact on your probabilities of retirement success and not running out of resources. Generally speaking, when referencing the “retirement red zone” we are talking about the 5 years leading up to retirement and the initial 5 years after retiring. We’ve written about Sequence of Return risk before, and how out of your control markets can completely de-rail your retirement simply due to unfortunate timing. However, you do have control of your portfolio construction and your distribution strategy when dealing with the “retirement red zone”. When withdrawing funds in retirement, a strategy is required to determine where you will pull funds from, and when. You may have also seen our article on focusing on “risk-capacity” compared to simple “risk-tolerance” exercises. Implementing a spending strategy that navigates any kind of market environment can be very low-hanging fruit to help navigate these critical early retirement years.

Much like a head coach will narrow the list of plays when in the “red zone” for the specialized field location, a retiree should focus in on several major decisions as they near the decision to retire. Paying down debt or continuing to accumulate assets is a frequent decision we see not given enough attention. This should support your personal circumstances, cash flows, and what most greatly improves your probabilities of success. The last few years of retirement savings may not move the needle as much as paying down debt when it comes to improving your retirement cash flows. Positioning your investments so there is enough safe assets in the years leading up to your retirement is also critical. We often see people waiting until the last minute prior to retiring to address implementing their retirement income investment strategy, and if the market is in a drawdown, the ball may have already been fumbled.

There’s an old saying when a player scores in the endzone: “Act like you’ve been there before.” Sometimes players score and almost seem surprised it worked, but that shouldn’t apply to your retirement. With adequate preparation, practice, and the right set of plays, you can be confident of navigating the retirement red zone from it’s many risks. If you have concerns that you aren’t prepared or want a second opinion set up an introductory 10-minute call with InFocus Financial Advisors CERTIFIED FINANCIAL PLANNERS™.

Investments in securities do not offer a fixed rate of return. Principal, yield, and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.