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Don’t Sit on a Portfolio Time Bomb

Don’t Sit on a ‘Portfolio Time Bomb’



 By Ryan Payne, President

Not long ago, I spoke with a client who asked me how much money he could withdraw from his savings each year. Having a wealth distribution plan is critical, and the lack of it is a big problem I see in the industry right now. Initially, you have to budget out and determine exactly how much money you’ll need in a given year. That’s something really therapeutic about any meeting we have with a potential client. Our first step is just figuring out what your expenses actually look like, then factoring in all the enemies you’re going to have in retirement, like inflation and healthcare costs.


Three Keys:

Growth in your portfolio is great, but also unpredictable

Inflation and healthcare costs are inevitable realities of retirement

‘Wealth Accumulation Strategy’ vs. ‘Wealth Distribution Strategy’


But another issue is the need to adjust your portfolio, and not doing that is a classic mistake. When I review portfolios on a weekly basis, I see so many people who still have their money geared toward what we call a “Wealth Accumulation Strategy.” But if you’re within 5 years of retirement or retired already, you really need what we call a “Wealth Distribution Strategy.”

Although growth in your portfolio is great, it’s also unpredictable. Rather, having a stream of current income and principal protection creates what we want for you in retirement – predictability and a lot of certainty. So you really should be looking at not only what you have to spend, but also how to fine-tune your portfolio to ensure you don’t have any hiccups along the way. Such as when the market goes down big and suddenly all those growth stocks that had been performing really well take a potential 40 percent correction, which could derail your entire retirement.

So my recommendation is, let’s figure out the budget and then put your portfolio under the stress test. Because you really need to understand what happens under different market conditions. I can tell you from all the investments I review, a lot of people right now are sitting on a portfolio time bomb with their allocations. That can seriously damage your retirement, so it should be addressed as soon as possible.