The Retirement Rescue System - How to Never Run Out Of Money In Retirement by Abreu David

Author:Abreu, David [Abreu, David]
Language: eng
Format: epub
Published: 2020-08-02T16:00:00+00:00

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“Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.”

– Jonathan Clements

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PART 2

Understanding the Solution

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“ Rule No.1: Never lose money.

Rule No.2: See Rule No.1.”

– Warren Buffett

Chapter 6

The “Power of Zero” Loss in Retirement

T he talking heads on cable TV shows would have you believe that if you gather the right information quickly enough or time the market just right, you’ll somehow turn your retirement dollars into a never-ending income stream.

While chasing the next big thing in a 24-hour news cycle may seem exciting to some, it seldom works for the average investor who simply wants to make sure they have enough principal and growth in their accounts to live on in retirement.

As the President of a financial and insurance services firm, I’ve found that the real key to making money for my clients in retirement isn’t chasing the stock market – it’s “the power of zero”. I don’t mean zero growth; I mean the power of never taking a loss in retirement. The power of zero is the power of zero losses.

The power of never taking a loss on down-market years might sound like fiction. We’ve been wired to believe that to have sufficient growth, we must take more risk. This is a thought process that is difficult to let go. One of the false long-held beliefs I repeatedly come across is the either/or mind trap when it comes to risk-versus-reward for retirement savings. When nearing or in retirement, many people believe they only have two options:

Option 1: Keeping their funds safe in a CD or savings account and settling for the low interest rates banks offer that currently do not keep up with inflation.

Option 2: Keeping funds at risk in the market to make returns that beat inflation, and hopefully having enough to live on.

But these aren’t the only options. Over the years, the marketplace has given birth to new financial vehicles that have fundamentally changed the way we look at risk-versus-reward in retirement income planning.

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