Retirement Answer Man

This episode of Retirement Answer Man is the second in the Market Correction Fire Drill series. After listening to the previous episode you know that a market correction is inevitable and how to measure your risk tolerance to help you become prepared for every eventuality. On this episode, we discuss how to rebalance your portfolio. Are you wondering why all of this is important to your retirement planning? Listen to this episode so that you fully understand how important rebalancing your asset allocation is to your portfolio, being prepared for the market correction, and your future lifestyle.

Apply your risk tolerance to your portfolio

Last week we discussed how to measure your risk tolerance and how to connect that tolerance to the life you want to live. On this episode, I cover how to implement what you learned in the Market Correction Fire Drill Step 1. Hopefully, you have been able to analyze your risk tolerance and discover how much risk you are comfortable with and match that risk accordingly to the life that you desire. When you listen to this episode, you will learn how to rebalance your portfolio to match the risk level that you have set for yourself. Listen to this episode to hear how regularly rebalancing your portfolio can help you keep in line with your risk tolerance.

What does rebalancing mean?

I know you are wondering what I mean by rebalancing your portfolio. Rebalancing means adjusting your portfolio to reflect the risk level that you have intentionally set for yourself. The better your stocks are faring the more off balance your portfolio can become, which means that you may be taking on more risk than you are comfortable with. As with all of your investment strategies, always keep your future retirement lifestyle in mind. Listen in to the full episode to hear examples so that you can truly understand what a rebalanced portfolio looks like.

How often should you rebalance your portfolio?

Remember to rebalance according to your retirement goals. If you don’t rebalance your assets could be out of balance and set up for more risk than you want. As the markets rise your assets can get out of balance. When your investments grow you’ll need to step back and analyze your portfolio. That way you can adjust your asset allocation so that you can get back on track and back into your comfort zone. The questions of when and how often you should do this can be challenging. While it might be different for each individual, if you listen in to this episode I’ll give you a good rule of thumb about when to do this and how often.

Rebalancing can be harder than you may think

It is hard to sell when you are doing well in the markets, sometimes you just want to ride the wave. When we rebalance regularly we ensure that you are thinking about how far you want to ride each particular investment. This can be very counterintuitive. We tend to want more of the good and less of the bad. But rebalancing regularly helps ensure that you sell high and buy low, which is what investing is all about. Listen to this episode to hear more detailed advice on how and when you should be buying and selling.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:56] Rebalancing your portfolio
  • [5:52] How often should you rebalance
  • [7:02] Rebalancing can be harder than you may think

PRACTICAL PLANNING SEGMENT

  • [10:26] How can a portfolio of pure stocks have a probability of success so close to a 50/50 stocks/bonds
  • [13:54] Is there a benefit to paying your January mortgage in December?
  • [14:59] How do you decide between an annuity and a lump sum?

THE HAPPY LAB SEGMENT

  • [18:02] What is the key to a Merry Christmas?

TODAY’S SMART SPRINT SEGMENT

  • [20:23] Rebalance your asset allocation that is tied to your goals

Resources Mentioned In This Episode

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM201.mp3
Category:general -- posted at: 6:00am CST

Talking about a market correction can either seem scary or far-fetched in this economic climate. But it is important to understand that a market correction will happen. And it is important is to know what to do when the market correction does happen. On this episode, we will go over how to prepare for when the market correction happens. This episode explains step one of a multi-step process. You will want to make sure to listen to this episode and all the episodes in this series to help you prepare for the impending market correction. Don’t let the market catch you off guard!

What are the most important things to do to help prepare your portfolio for any eventuality?

How do we fortify our investments when the market correction happens? If you are near retirement assessing your risks is one of the most important things you can do to prepare yourself for retirement. On this episode, we go over two important questions to have in mind to see if you are really prepared for any eventuality. As you get closer and closer to retirement age you need to reassess your risks and their connection to how you hope to live in your retirement. Listen to this episode to find out which questions you should be asking yourself to prepare yourself for the inevitable market correction.

How do you measure your risk tolerance?

Have you really thought about your risk tolerance when it comes to your retirement investments? This episode will make you think again. You need to make sure you know how much risk you are taking in your investments. The investment industry maximizes your risk tolerance, but the last time you thought about risk may have been some time ago. Sign up for 6-Shot Saturday to get the PDF tables that I have created to help you really analyze your risk. You’ll want to listen to this episode to understand how to ensure that you are taking the right amount of risk for your comfort.

Is your risk tolerance tied to the life that you want to live?

Make sure your risk tolerance is actually tied to the life that you want to live in retirement. Sometimes the risks you can tolerate may have no actual connection to the lifestyle that you hope to live in retirement. Take some time to this week to really analyze the risks that your portfolio is set up to take. Are these the risks that you are willing to withstand, and how could these potential risks affect your retirement? You can use the PDF models that I will send out in 6-Shot Saturday to help you analyze your risk tolerance. Be sure to listen to the full episode to find out what else you should be thinking about to prepare for the market correction.

Find your balance

As you begin to move from the accumulation phase to the distribution phase of your investing your risk-taking behaviors may need to be tweaked. Finding the right balance that you are looking for is the first step in preparing for a market correction. The PDF models that I use will really help you get a grasp of your risk tolerance and help you visualize your chances of success with different planning models. These models will help you strike the balance that you are looking for in your investments. Make sure you listen to this episode to hear how mitigating your risk can help you prepare for any market correction and be sure to sign up for 6-Shot Saturday to get the free PDF model to help you make the right choices for your investments.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

  • [1:22] A market correction hasn’t happened for eight years, how will you handle the next one?

HOT TOPIC SEGMENT

  • [4:52] What to do when the market correction will happen
  • [9:20] Let’s learn about risk tolerance

PRACTICAL PLANNING SEGMENT

  • [18:47] I answer questions on health insurance costs
  • [21:50] What are some book recommendations for retired people

THE HAPPY LAB SEGMENT

  • [26:11] On self talk becoming your reality

TODAY’S SMART SPRINT SEGMENT

  • [28:21] Understand how much investment risk you are taking and analyze whether that is the risk you are willing to take

Resources Mentioned In This Episode

 BOOK- Essentialism by Greg McKeown

BOOK- The Slight Edge by Jeff Olsen

BOOK - Investing for a Lifetime by Dr. Richard Marston

BOOK - Rock Retirement by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center 

The Retirement Answer Man Facebook Page

 

Direct download: RAM200.mp3
Category:general -- posted at: 6:00am CST

What can we control in life? How can we identify factors beyond our control? The trouble with retirement planning is that so much of it relies on factors beyond our control. Join me today as I discuss the impending force of a market correction and answer some listener questions from our Retirement Plan Live Webinar. We must learn to accept that there are things beyond our control. Once we do that and we learn to only worry about the things that are within our power to change we begin to feel much freer. So listen in to today’s episode to find out how to identify forces that are within your control to free yourself of inner turmoil about your retirement.

Market corrections may not be all that scary

Vanguard published a report recently stating that there is a 70% chance that there will be a stock market correction. I’m here to tell you that that’s not true, there is a 100% chance of that happening! Unfortunately, no one can accurately predict when this will happen. There is so much concern that head of Goldman Sachs feels unnerved by things going on in the stock market. Listen in to hear what his 8 reservations are. As scary as market corrections are, they can be healthy, similar to a forest fire. They help to burn off the excess, weaker growth in the markets. Find out what I mean by this by listening to this episode of Retirement Answer Man.

What can we control?

We know a correction is going to happen but not when or how extensive it will be. So, knowing all this, what do we do with this information? We can’t control or predict when a market correction will happen, but we can control how we allocate our assets to work towards a life that we want. Right now is the best time to discover how to control your balance sheet and make sure that your financial plan is fully in order. Listen in as I discuss how to financially weather a market correction and what you should be doing to prepare yourself for the inevitable market correction.

How do taxes affect your retirement plan?

Are you curious as to how to apply what you learned in the Retirement Plan Live Webinar to your own retirement plan? You guys chimed in with some incredible questions about our Retirement Plan Live webinar. On this episode, I address some listeners’ questions and make things clearer on how we can take Lori and Bruce's situation and apply it to you. Listen in as I answer some fantastic listener questions about taxes and retirement. We discuss state income tax and when to contribute to a Roth IRA. Listen to the Q&A portion of the show to find out to what extent the planning tool takes taxes into account and how moving states can affect your retirement plans.

What you can do to raise your confidence level in your retirement plan

Are you concerned about confidence levels in your own retirement plan? One listener is. Listen to this show as I address this question. You may feel concerned that your money could run out. But what can you do to up your confidence level in your retirement plan? Think of the all the levers you could pull; work longer, spend less in retirement, save more, take more risk. What could you do to become more confident in your retirement? I get down to the heart of this question so listen in to hear my thoughts on this matter and discover why is an 80% confidence level ok when talking about retirement. We must make smart, balanced choices to live a great life today but be confident about tomorrow.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

  • [1:22] Today I discuss market corrections and answer some questions from listeners

HOT TOPIC SEGMENT

  • [3:36] Vanguard says there is a 70% chance for a stock market correction
  • [4:42] The 8 worries that the head of Goldman Sachs has for the stock market
  • [8:42] What can we control in the market?

PRACTICAL PLANNING SEGMENT

  • [12:52] Listeners comments and questions about Lori and Bruce
  • [13:52] Listener questions about taxes
  • [20:10] Confidence scores in retirement

THE HAPPY LAB SEGMENT

  • [27:56] On Christmas decorating and allowing yourself to fully celebrate events

TODAY’S SMART SPRINT SEGMENT

  • [30:02] Make a list of events to celebrate at a higher level than in the past

Resources Mentioned In This Episode

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM199.mp3
Category:general -- posted at: 6:00am CST

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