Managing Your Golden Years
Our Challenge: Let’s assume investors are rolling money out of 401k plans into self-directed IRAs. These assets represent virtually all of the money they have accumulated for retirement (plus Social Security). They have not dealt with advisors in the past because they used the default feature in their qualified plan (a Target Date Fund).
Our Strategy: We have to make them feel comfortable that Prime is the right choice to manage their assets after they have retired. These early years are critical because any material down years will impact their standard of living and future financial security.
Our Recommendations: Deliver the following information to investors.
- Introduction
- Can be a period of higher expenses (golden years, retirement, second home)
- Lower risk works best during early retirement years
- Returns should cover distributions, inflation, and expenses
- The only exceptions are people with so much money they cannot outlive it
- Principal focus is longevity risk (running out of money late in life)
- Big losses in early retirement years produce dire consequences (part-time jobs, reduced standards of living, financial insecurity)
