THIS IS NOT THE MOUNTAIN
YOU WANT TO RETIRE TO…

One or two bad years can kill a retirement plan

In South Florida, our home, many retirees and pre-retirees escape the summer heat by going to the mountains of Colorado or North Carolina. Some eventually buy second homes there, or even move there for good. Now, check out the picture below. It's a "mountain" chart of the S&P 500 from 1998-2005. Can you imagine if you decided in 1998 that you would retire in seven years, and based that assumption on your advisor's projection that you would make a 10% annual return over that time?

We often forget that when you hit your peak earning and investment years and when you retire are all somewhat random points in time. The markets do not care about that timing. The last thing you want is to get suckered into some advisor's line about expected market performance based on historical averages that may never, ever come close to the actual experience you have in the future.

THE LESSON HERE: conventional wisdom about investment strategy does not always apply to you! A more flexible approach to preservation and growth of assets may help you retire or maintain your lifestyle in retirement.