Wed, 29 January 2020
Investing in retirement is different than any investing you’ve ever done. The asset allocation that you’ve been doing your whole life won’t cut it in retirement. On this episode, you’ll learn what comes after asset allocation. You’ll also learn how to manage market risk. And BW joins us in the Coaches Corner to discuss how to survive bear markets in retirement. You’ll definitely want to listen in to hear my pie-cake analogy, don’t miss it!
What is asset-liability matching?
Have you ever heard of the term asset-liability matching? This is a term typically used in the pension management world but we can apply it to our own retirement. Asset liability matching is the process of investing in a pool of assets so that cash is available when you need it to cover consumption. It is when you take a pool of assets to cover the short-term but you also need that pool to cover expenses in the long-term as well. This is a good term to refer to how we must cover our retirement expenses.
Asset allocation is not the only way of investing in retirement
You’ve been told your whole life that you need to focus on your asset allocation when investing. Asset allocation is so important to the accumulation stage of retirement planning. But in retirement, asset allocation is not the only thing to consider. Rather than sowing your seeds for growth, in retirement, you are now reaping the rewards from a lifetime of hard work. So now is the time to rethink your asset allocation strategy.
The pie-cake analogy
We often refer to asset allocation as a pie. You’ve seen all of those pie charts with different percentages of stocks, bonds, and cash. But instead of a pie, in retirement, what you really need is a cake. One of those big, multi-tiered cakes, like a wedding cake. But the cake you need is actually made of pies. Yep, that’s it! A pie cake! You’ll want to create your cake with 3 or 4 layers and the pies will be made of different things. You really need to listen to hear how amazing this analogy is.
What should your pie-cake look like?
So you’re all ready to build your pie-cake, but what should it look like? Sure there are layers, but layers of what?
Listen in to discover how you can build your cake-pie and eat it too!
OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN
WHAT DOES THAT MEAN SEGMENT
PRACTICAL PLANNING SEGMENT
COACHES CORNER SEGMENT
TODAY’S SMART SPRINT SEGMENT
Resources Mentioned In This Episode
Roger’s YouTube Channel - Roger That
BOOK - Rock Retirement by Roger Whitney
Roger’s Retirement Learning Center