Briefcase Study

Winter 2018: Briefcase Study

In Briefcase Study, February 2018, Income Planning, Investment Management, Steward Articles by Adam Cufr

With our progress review season well underway, we’ve had an opportunity to see inside the plans and minds of many families who are intent on building and maintaining a successful retirement. In doing so, one theme remains central to financial success: planning.  Not hoping, not wishing, planning. And while this may sound a bit like a broken record from me, the point I’m hoping to illustrate here is one that is critically important when the markets are so wild and seemingly unpredictable.

In one particular conversation, the couple had grown quite concerned about the recent stock market declines. With so much scary news, was their retirement in jeopardy? Would they still have enough to live the life they’d enjoyed or should they do something drastic to get out of the way of the wave of bad news coming from Wall Street?

In any situation where fear is present, it pays to step back from the ledge and seek perspective. The way we did this, and do frequently, is to pull up their retirement plan and revisit the objectives they’ve defined for themselves. By looking at available income sources, like Social Security, pensions, annuity income; incomes that are guaranteed and independent of the whims of the stock market, it’s quite comforting to know that running out of money isn’t going to happen. In fact, these folks set themselves up to have almost all of their lifestyle expenses covered by these guaranteed sources…for the rest of their lives. Their market-based investments were really just a way to provide themselves some nice extras rather than their necessary income.

Whenever we’ve had significant market volatility, we’ve always suggested going back to the plan. More often than not, a calm is restored, even when times are tough. When we compare objectives to available resources, even if some resources are currently on the decline, we find that a clear head allows for better decision making.

As always, let us know if you’d like to revisit your plan. Like we found with this couple, even a small dose of plan review can provide a large boost to confidence.