Don’t Panic: Smart Strategies for Navigating Market Volatility in Retirement

TPIR Ep 109 Audio Extracted.wav: Audio automatically transcribed by Sonix

TPIR Ep 109 Audio Extracted.wav: this wav audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal, and your confidant. All of the above. Thanks so much for being a part of things, as always. And I am Josh Rhett Noble, the attache to the advisor aka co-host. Yes, that we just decided to come up with a fancy word for for co-host and it makes me feel important. It's, it's, it should and it's, and it's kind of a kind of a gay word. So there you go. It's just sounds, sounds gay enough. Um, and we can say that yes, we can. But anyway, um, no, I thank you for being a part of this too. If it's your first time joining the show. Um, Josh is not only the co-host, he's also my hubby and um, does the voiceover for the beginning of the podcast version of the show at the end of the podcast version of the show. So, um, he's contributed a lot over the years of this show, but he's joining me now on a regular basis as co-host and basically tell, tell the people, if you will, what your role is, um, in the show. Sure. Well, my role is to first off, rain Matt in to make sure that he's not speaking too much and too quickly with too much information. But basically, to put it into layman's terms, what you're, you know, what you're advising is what you're coming across and what you're saying because a lot of this could be very confusing.

Speaker 1:
And obviously, you know your stuff, and I have an inquisitive mind and I'm sure the listeners do too. So I'm here basically to ask questions to help make sense of some jargon that maybe the listener has no idea what you're talking about. Yeah, it's easy to get in that sort of space in this business of like financial stuff, and you can just sort of use terms that you hear every day, but like the average person doesn't. And so I'm glad for you to be here to, to rein me in. Um, also, um, reach out, by the way, if anything that we say today sparks your interest, piques your interests, makes you say, hey, that applies to me or I've got questions about this or whatever. Go to the website. Take pride in retirement.com. Take pride in retirement.com is the website. Once again, you can also give me a call 85524692178552469211. You can reach out to me at either of those methods. Consultation absolutely free. Even if you just want to call and ask a question, email a question via the website, whatever you want to do, I'd appreciate it very much. Um, and I think in the end, you would appreciate it very much, if nothing else, just for another set of eyes on your plan, right? Yes, yes. And please go to the YouTube everything. Follow on Twitter, on Instagram, on the face places and please subscribe on YouTube.

Speaker 1:
Yes, please do that. And, and you'll, you know, you get a personalized song for subscribing. And so I'm still working on that too. And I have no idea what I want it to be. Maybe it'll be different every single episode. Maybe. So I just have like a handful of them and just keep keep workshopping it until the one that that we find works works, you know? Um, but anyway, so today here on the show, talking about something that is on a lot of people's minds, especially here lately, and that is market volatility. Um, you know, if you're close to retirement, especially there's this concept that, you know, a downturn, you don't want to have a big market downturn right before you retire. Um, and we'll get into all the reasons why and all of that, but it can really feel very, very stressful if you're like on the cusp of retirement right now, because it's not like just seeing numbers on a screen. It's not just checking your 401 K every now and then. It's not just, you know, turning on the TV and seeing the stock ticker at the bottom. This is like going to be your actual income, right? And so that's why one of the reasons why it's so important, and I came across this really, um, helpful article from The Motley Fool actually lays out some practical ways that retirees can protect themselves during times like now when markets get shaky.

Speaker 1:
And we're going to kind of break that down today. Yeah. And I think that's probably the part people feel most. I don't know, like just getting past all of that. And when it comes to being, you know, just starting affecting your actual day to day life, like, okay, now this truly matters, right? Yeah. It's no longer theoretical. It's actually in practice. Right? And, um, yeah, it really hits home at that point. And so let's talk more, I guess, about why this matters for retirees. You know, we really always say retirees, you're in a different stage of your life. So you face a different reality than younger investors. People in their 30s, 40s and even 50s don't face the same realities as retirees because they're, uh, you know, those younger people, those younger workers are growing their money. You know, that's all about growth and it's all about, you know, how much can I, can I get that one big number that people often kind of focus on. But then you enter retirement, you flip the switch and you're taking income from it. So it's a whole different beast. And that introduces something that's called sequence of returns risk. And so, you know, it means that if the market goes down early in retirement and you're withdrawing money at the same time, that is I like to sort of call it a double whammy and it can have a big lasting impact on you. Uh, in, in, throughout your retirement years, not just then when the market is in a downturn.

Speaker 1:
Yeah. So it's not just that the market goes down, it's when it happens that makes it really matter. Yeah. You know, timing is everything. And I don't mean to say that you should try to time the market at all, because I don't think anybody should try and time the market, you know, buy low, sell high is, is kind of a basic thing that we all kind of try to do. Very few people get that right on both ends of that. You know, sometimes you can buy low, sometimes you can sell high. It's very rare that you actually do that 100% of the time on both sides of it. So not saying you should time the market, I'm saying what you should do is just be, um, you know, what you should do basically is have a plan, be prepared ahead of time. And that's why we have someone like you, Matt, to help plan. Well, you know, I mean, that's kind of that's what I do. It's what I'm here for, uh, for, for people. And, you know, I mean, because if you don't, if you don't have a plan and you've got those early losses in your retirement years, and that is combined with withdrawals at the same time, and it really just shrinks your portfolio faster and faster and faster, um, than people expect. And so you got to plan for those downturns ahead. And that's really why it is important.

Speaker 1:
So let's look at some strategies here. Strategy number one, that this Motley Fool article, um, goes through, uh, share what strategy number one is with our listeners. All right, let's see, build a cash buffer. Ah, the old cash buffer trick. It's a Strat. Strat from a mat, a mat strat. It's a mat Strat. Yeah, it's a mat Strat. So build a cash buffer. What does that mean? So building a cash buffer is basically, um, you know, having having reserves, having something to fall back on should something unthinkable kind of happen. Right? And so one of the, it's one of the biggest takeaways really from this Motley Fool article. And it means keeping part of your portfolio in something that's very stable, but something that you can also access. So, you know, I like to say keep it, keep it in cash, but don't when I say keep it in cash, I'm not saying like, oh, put it in the under your mattress or, you know, stuff it in a safe and never look at it again. No, um, that's not a good thing because then it's not doing anything for you, right? You want it to be growing still. Um, maybe in a high yield savings account, something like that, where you're getting a fairly decent rate of growth, but at the same time, you still have easy access to it. So that's super, super important. And the purpose there is obviously to cover those income needs that are kind of immediate in case of a big market downturn or whatever, without, um, touching your investments that are really the thing that is meant to grow over time.

Speaker 1:
So with that, basically you're not being forced to sell when the market's down, right? I mean, and that's one of the big points here is, is you don't want to sell when the market is down. You know I said a few minutes ago buy low sell high. But you don't want to um you know, sell low and buy high. That would just be completely backwards. Right? And so you don't want to be forced to sell in case of an emergency when the market has experienced or is experiencing a downturn. And you that way, if you do that, you lock in your losses. Well, you want to avoid that at all costs, right? And because you take away the possibility of that money growing at all, because now it's not in the market, period. And you know, you give your investments time to recover. If you if you are able to leave those investments alone and not panic sell or anything like that, and think of that cash as a buffer between your income, what you need to live on and big market swings, especially early on in retirement. I think that's a, it's a great thing to have. Um, and I think we all should have it no matter your age, but especially when you are early on in your retirement years.

Speaker 1:
Yeah. Well, moving ahead, let's do mat Strat number two, adjust your asset allocation. Strat number two. Mat strategy number two, I love it. Um, yeah. So adjust that asset allocation. I, I don't and I know that because you're with me, you know, this reference because I'm such a dork. Set it and forget it. You know, the old late night infomercials, the guy with the like countertop rotisserie thing. That is not what you want to do when it comes to your investments over the long term. You don't want to just set it and forget it. And then, you know, your asset allocation may have been great when you opened up your 401 K 30 years ago, but now, you know, 30 years later down the road, if you haven't touched it, then you've got a completely wrong asset allocation, probably because think about how different the world was 30 years ago. You know, AI wasn't a thing back then. Well, now maybe you want some AI growth stocks inside that portfolio or something like that, just as an example, right? So as you get closer to retirement though, um, speaking of adjusting that asset allocation, you want to adjust your investment mix just simply based on your proximity to your retirement date, right? Typically you want less exposure to stocks than during your working years because you have less time to make up for any losses that you experience. You know, you kind of turn from the whole idea of, of growth and of, you know, accumulation to preservation and you really shift your focus, um, to, to yeah, preservation, but also stability and also income because you've got to live on like income is where it's at in retirement.

Speaker 1:
Like having a big pot of money is great, but what you're going to live on, you're going to live on the income that you're able to generate from that. And, but you're not saying to pull everything out of the market, right? No. Absolutely not. I would, I would not at all advise anyone to do that. And of course, as we say here on the show, um, the, uh, the, the information that I share here on the show is for educational purposes. It's for, you know, it's generalized information, but also, you know, when I meet with you like one on one, for example, if you reach out and take pride in retirement for that consultation, which, by the way, is completely free, no obligation, all that stuff, I thought I should say that again. Um, but I'm going to assess your individual situation, but I'm not going to ever tell anybody. Oh yeah. The market's down. Pull everything out of the market. You know, don't don't do that. Because for that very reason that I was just mentioning, you lock in those losses. You still need growth to keep up with inflation or hopefully outpace inflation. And the key is to really balance things.

Speaker 1:
You know, too much risk is going to really hurt you in a downturn. But too little growth can hurt you over time because you're not keeping pace with inflation. And you're certainly not if you're not keeping pace with it, you're by definition not outpacing it either. So you've got to make sure that you are doing the best you can to keep up with it and hopefully surpass it. It's about really aligning your investments with where you are in life right now. Again, that asset allocation may have been great for you 30 years ago. Chances are that same allocation not great for you right now. And I just want to say always, this is what I like to say about Matt, that he is the advisor that cares and that is the truth. He has your best interest at heart. Uh, there's there's some rough people and patches that you could go roads, you could go down with other people. So I love seeing what you're able to do with your clients because everyone's different. That's the thing. Everyone's situation is going to be completely different. And having that personal touch that you give is truly a wonderful thing to see. Thank you. I appreciate that. And folks, reach out, take pride in retirement, I really do. You know, I operate in a fiduciary capacity. So I not only, um, just like ethically, morally and all of that keep your best interests at heart. Any recommendation that I give after I, you know, analyze your portfolio and make my recommendations, but I, throughout the process have to do that by law, really, I mean, I am held to a fiduciary standard.

Speaker 1:
So that is, um, really the way that I operate. I would operate anyway, but I'm held to that standard. So yeah. Reach out. Take pride in retirement or call (855) 246-9211. Yes. Let's get to mat Strat number three. Be flexible with withdrawals. What does that mean. So flexibility it's it's a big point to hit here because if the market is down, you know I said if you're taking withdrawals from your investment accounts, your retirement accounts when the market is down, then you're going to just be, uh, have that, have that snowball effect, right? The market's down. You're also taking these withdrawals and all of that. And so you've got to be flexible with that though, and think about reducing those withdrawals during a market downturn, even temporarily that can help protect the longevity of your portfolio. I mean, really, really can. I mean, that sounds easier said than done. All right. Yeah. I mean, it does sound that way. It can be easier said than done, but it doesn't have to be a drastic thing, right? Maybe you delay one big purchase. Like if you've got your eye on a new car, maybe you. That's something that you can put off a little bit down the road until you've got some recovery in the market. Maybe you cut back on discretionary spending for a little bit.

Speaker 1:
Maybe you don't need all 19,000 streaming services on the face of the planet. Maybe you just didn't need 1 or 2. And so those are some things that you can look at in those times when, you know, there's this downturn, there are these forces that are taking place that you have no control over. Control the things that you can in that situation, right? And even those like small adjustments can give investments more time to recover. And also, I will say, if you've got that cash reserve that we talked about in the very beginning of this, all that strategy, number one, that Strat number one, um, was, you know, have that cash reserve. If you've got that, then you don't have to think about going and dipping into your investments or your retirement plans at all. You've got that cash reserve in that difficult time. So that really is another good buffer for you to think about. And then if it comes right down to it, yeah, just maybe delay that big purchase or cut back on spending some way that you can. I love that very good advice, Matt. I, well, you know, it's almost like you advise people almost, almost it's almost that way. It's almost like I've seen these things before. Yes. Alright, let's move on to Matt Strat number four. Don't panic. Sell. Yes. Do not panic. Sell at all. Um, and this is probably I feel like the most important one.

Speaker 1:
I've referenced this before. I'll reference it again. I am sure the um World War two posters from Great Britain that have like sort of taken off a life of their own in popular culture in more recent years. Keep calm and carry on. And we'd love anything British, just so the listeners know. Of course. Anyone want Matt to come be a speaker in the UK? Please reach out to. Take pride in retirement, please. Because Lord knows we'd love a trip to the UK. About right now. Um, but that's a story for a different day and a different podcast. Um, but anyway, so no, we do love all things British. And so that's why I think about this quite a bit, especially in this context though, it's like, keep calm and carry on. Don't go overboard with. Oh my gosh, the market's down and I have to sell right now or I'm going to lose even more. You don't know where that bottom is of the market. You may be there. And then if that is the case, you're missing, like say, you know, if the market has hit bottom starts going up the next day or even the next minute today. You know, just as quickly as things can change. You are already missing that growth. You're already missing that upside and that recovery. And so if you sell during a downturn, again, you lock in those losses and that takes away that chance to recover.

Speaker 1:
So give yourself a chance. Give those investments a chance and don't make emotional decisions like you've been saying. Yeah, that's obviously where people can get into trouble is just acting out of that fear. Yeah. And, and that is a big thing. Like you've got to keep in mind market downturns happen in the midst of it. It can be a little difficult to remind yourself of that, that market downturns are normal. Um, they're kind of a normal part of the cycle, especially, you know, when things are kind of going crazy in the world and you see stuff happening that's causing the market downturns. And it's just like, what in the world is going on? It can be difficult in the middle of that to say, oh, I'm going to keep calm and carry on. I'm going to stay invested. I'm going to do all the things. But you've got to just make that kind of a mantra because historically, markets have always recovered over time. Sometimes it takes longer than it does. Other times, like after the 2008 financial crisis, 2008 2009, it took a long time for the markets to get back up to where they were before that financial crisis. There was slow and steady growth in the markets over years, but eventually the markets did recover and we're far beyond now what we were back then. And so the key really is to stay disciplined, have a plan and then stick to that plan, right? You don't want to just be going off and making these emotional decisions and all.

Speaker 1:
And just just make that your mantra. Keep calm and carry on. Right? Love it. We used to have that poster somewhere. I don't know what happened, but yeah. Oh, it was on a little. It was on a little notepad thing. That's what it is. It's a notepad thing. Yeah, I should find that and and just bring that back up. We can make a take pride version of that somehow. Oh, I know that could be swag that we give away um at Atlanta Pride next time. Yes. Which I'm wearing. I wore the shirt today but you can't even see it on the thing. Think? But this is one of those shirts. Kind of see it. Oh, yeah. You got. Yeah. There you go. For those listeners, I know you can't see it if you're just listening, but it's a beautiful take pride in retirement. Purple shirt. All right. So Matt Strat number five. Consider guaranteed income sources guaranteed income. That sounds nice. It does. Um, and this is probably one of my favorite strategies here. And reliable income is so important. Like I was saying a few minutes ago. Having that one big number that you've saved up and that you've invested and all of that, like, oh, I've saved $1 million for my retirement. That's fantastic. And it is. Right. But or, you know, if you're a big number is 500,000 or 200,000, whatever your big number might be, it doesn't doesn't matter what the exact number is.

Speaker 1:
It's just off the top of my head. But saving up that one big number that you've achieved. Great. Wonderful. How are you going to live on it? Right? You can't just start drawing it down because if you do that sort of willy nilly without a plan, then you're going to run out of money eventually, and that is the biggest fear of retirees, according to survey after survey running out of money in retirement. Yeah. And so, you know, talking about guaranteed income sources, you've got things like Social Security. I am an SSA, a registered social security analyst. I can help you make the decision that's going to optimize your Social Security income. If you've got a spouse, I can help you both coordinate those withdrawals or those not withdrawals, but those claims, those benefit claims. And so it's a super important decision to be made the right time and the right claiming strategy for you. Pensions are another one, but those are going the way of the dinosaur. I can help you set up something that we're going to talk about in a minute here that can kind of take the place of that pension, because the old workplace pension is pretty much gone. Like there's just a small fraction. Now, I think less than 15% of private companies actually offer those. And, you know, maybe if you work for a government agency or something, you still have access to one.

Speaker 1:
But that's neither here nor there. And there are other guaranteed income strategies as well that we could explore if you go to take pride in retirement. And, you know, submit your form there just with your basic contact info. Reach out for that free consultation. I'd be glad to, to show you what those other guaranteed income strategies might be for you. I mean, this is sort of where the idea of personal pension comes in, right? Yeah, that was, uh, that was where I was where I was headed, um, a second ago. Yeah, yeah, that, that is, um, absolutely right. Because pensions have largely just gone the way of the dinosaur here and a personal pension. What you can do is take a portion of your portfolio. I wouldn't ever advise anybody in the vast majority of scenarios to take all of it and put it in, in something like this, but take a chunk of it and put it in something that's protected from market downturns. And it's going to offer a decent rate of growth, and it's going to then generate income in retirement. And it's income that's going to be guaranteed. And not only does that guarantee give you yes, that that necessary income in retirement, depending on the performance of an underlying index, it could also give you increased income during retirement as things go on. It also gives you peace of mind. And that's something that you can't really put a price on.

Speaker 1:
So that is, um, just, I think the biggest part of this is just getting that peace of mind that you don't have to worry about running out of money in retirement. And the more of your essential expenses that are covered by guaranteed income, the less you have to rely on the market and the less stress that you feel during market downturns. I mean, you have taken the time and the initiative to be prepared so that you don't have to be scared in retirement. Less stress. Yes. Less stress. Thank you. Less stress for all involved. Less stress. Absolutely. That's what I'm all about, is giving people less stress in their lives. And I feel like this is especially this is especially important, right, to our community, the LGBTQ plus community. Absolutely. You know, a lot of us don't have traditional pensions that we can can rely on. Um, you know, maybe we've had to build a retirement kind of on our own terms, um, for whatever reason it could be for, you know, you experienced maybe job discrimination earlier on maybe things, uh, you know, you've had some bumps along the way. And so that makes having a strategy like this, I think, even more critical for members of our community. And so that's really why that gets to the heart of why I do this podcast, right? Because I, uh, you know, have, um, just received so much love and acceptance from our community. Um, and I want to give some of that back and some of that like, um, sort of pay it forward a little bit and help you as an LGBTQ plus person Overcome those those obstacles and realize that, yeah, you can actually have a plan that works for you.

Speaker 1:
And, you know, I mean, it was, it's funny because you'll remember who I'm talking about here, but, um, you know, we had a guy come up who's now a client, um, come up and we were at Atlanta Pride last year. A guy came up and said, well, I'm never going to be able to retire. I've just made that, made that up. And I actually ran the analysis, did the plans for him and showed no, you can actually retire. Um, that here's, here's the plan, here's how we're going to make it work. And he's making the, you know, making that plan work for him and he's going to be able to retire one of these days. Uh, he thought he was going to have to work until he was in the grave. So, um, that's just, that is really what I do this for and, and why I do what I do. Yeah. And you do it beautifully. And I remember that obviously when you. That's I love seeing clients see that spark in their. When I see that spark in their eyes, they're like, oh, this actually might work for me. And again, everyone's situation is different and that's what you're there for.

Speaker 1:
You know, if you can help them, you're going to help them. You're also someone that could be like, if you can't, I can't, you know, like you're not going to reel them into something. It's literally their, you know, their best interest at heart, which is great. Yeah, that's, that is the goal always. And that's the thing, like at the, at the end of the day, you know, as we've been talking about on this particular episode, market downturns, they're going to happen, right? That's part of investing, but they don't have to be something that derails your retirement, no matter who you are or where you come from, who you love, how you identify, or how much money you have, you honestly and truly deserve a retirement you can take pride in. And that is regardless of not only who you are and all of those things, but what happens in the market that should not dictate how you are able to live in your retirement years. So you've got to be prepared. You've just got to have a plan in place that accounts for that. You've got to have a plan in place that accounts for volatility before it even happens. And so that can really make a huge difference if you've got that cash buffer. You've got the right mix of investments and flexibility in those withdrawals. You've got reliable income coming in. You are in a much stronger position to be able to weather the ups and downs of the market.

Speaker 1:
Right. And it sounds like the big theme here is control, which is focusing on the things you can actually control instead of just reacting to the market. Yeah, you can control the controllables control the things you can control. I preach that all the time, and I will do so until I am blue in the face because it's so important. Don't worry about the things that are outside of your control, but control the things that you can. And the goal here is not to avoid downturns. It's to be prepared for them so that those are not the things that dictate your financial future. If you prepare for them ahead of time, you don't have to let that be the case. You can dictate your financial future and that gives you the power and that gives you the control. And so yeah, take the control away from all the uncontrollable things and control the things that you can. Um, I'd be glad to help you do that if you, if you want a plan, if you don't have a plan or if you've got one that you're not quite sure if it's working for you, you're kind of scared about what's going on in the markets right now. Give me a call. Um, I would love to sit down with you to be, um, you know, at least a sounding board. Take a look at things, take pride in retirement. Com is the website. Take pride in retirement.com or call 85524692178552469211.

Speaker 1:
That is the number and the consultation is absolutely free. And when I say free, I mean free. And about this theme too, Matt is just taking control, which I think is a wonderful thing to to focus on. And if you have a plan, that's a great philosopher once said, if you stay ready, you ain't gotta get ready. It's so true. Wiser words were never spoken. Um, that that it's going to do it for this edition of the show. We do have though some a great episode also coming up later on, um, in the, the week and just a couple of days here, another episode is going to talk about kind of some steps that you can take, uh, if you're just approaching retirement or early on in retirement, kind of no matter what the market's doing. And we'll talk about that coming up next time. But Mr. Joshua Noble, thank you so much for being a part of the show. Of course, of course. Thank you for having me yet again. I told you we like all things British there. Um, and thank you for being a part of take pride in retirement. No matter who you are, where you come from, who you love, how you identify or how much money you have, I appreciate you being a part of it. We both do. And thank you so much. Help spread the word. Like and subscribe if you're watching on YouTube as well. Until next time, take pride in yourselves and take care of each other. We'll see you then.

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