Broker Check
Don't Outlive Your Money!

Don't Outlive Your Money!

| May 20, 2015

I have been serving with the Evergreen Volunteer Fire Department (EVFD) since 1995, and I learned early on that most of what we do as Firefighters and First Responders involves identifying and mitigating risks. I believe our most dangerous job is protecting the Evergreen community from the devastating effects of wildfires, which can be risky. We are taught the credo, "Risk a lot to save a lot and risk nothing to save nothing," meaning the only time we should even consider risking our lives is to save another member of the department or our community.

April is the month where EVFD gears up for the upcoming summer forest fire season. Preparations start with the infamous timed speed hike known as the Red Card "pack test." Firefighters carry 45-pound packs for 3 miles in under 45 minutes to verify they are fit enough to safely carry out their responsibilities as wildland firefighters. The pack test mitigates the #1 risk to firefighters - heart attacks.

April EVFD Company training included a comprehensive classroom review of wildland firefighting operations and stressed safety. We then spent the first weekend of May in the far western part of Evergreen near the Mount Evans Wilderness conducting field exercises with live fire. We drilled on everything from triangulating distant smoke columns to evacuating homes and the actual extinguishment of live fire.

We spent Saturday morning practicing urban interface operations, which addressed the #2 risk to firefighters: accidents related to operating our large heavy fire apparatus on our narrow, steep and winding roads and driveways. We navigated to various homes in the area and backed into the driveways exactly as we would during an actual forest fire. We then performed rapid property assessments to determine which mitigation actions would have the maximum benefit for the time invested.

After lunch and on Sunday, we located and extinguished controlled live fires using hand tools and fire hoses. This was great fun and brought all the training together. It's tough to spend an entire weekend away from family, but there is no substitute for conducting potentially dangerous fire operations in a controlled environment with the support and coaching from our training staff.

Preparing financially for your retirement follows a similar sequence of identifying risks then creating and following a game plan that will serve you well not only during your wealth accumulation years but also leading up to and during retirement. There a wide spectrum of wealth accumulation and investment information available – some of it good and some of it not so good. Despite this, the 2015 DALBAR study suggests that all this information is not yet leading to optimal investor outcomes.

DALBAR just published the 21st Annual Quantitative Analysis of Investor Behavior (QAIB), which measures the effects of investor decisions to buy, sell and switch into and out of mutual funds over short and long-term timeframes (email for a complimentary copy). The results consistently show that the average investor earns less - in many cases, much less – than mutual fund performance reports would suggest. In 2014, the 20-year annualized S&P500 return was 9.85% while the 20-year annualized return for the average equity mutual fund investor was only 5.19%, a gap of 4.66% annually.

With interest rates at historic lows and US stocks at historic highs, retirees are faced with substantial risks and not much of a roadmap to go by when seeking to create reliable, stable monthly retirement income from their portfolio that keeps pace with inflation. This is an area of great interest and passion for us, and we have engineered solutions that address the biggest risks retirees face:

  1. Outliving your money 
  2. Loss of purchasing power due to inflation
  3. Market volatility that prevents the asset growth needed to fund a long and prosperous retirement

Everyone needs not only an efficient wealth accumulation plan, but also a strategy for transitioning their portfolio for retirement income and my approach as an Investment Advisor Representative of Stewardship Advisory Group recognizes that:

  • Any investment risk you take should provide a corresponding long-term benefit, and these risks should be based not only on your appetite for risk but also on your goals
  • The most efficient and effective way to organize your retirement portfolio is to segment it by time horizon and to leverage investment risk and its commensurate rewards for the longer-term segments that will fund your retirement needs 10 years and beyond
  • Always having the next 10 years of retirement income needs available in stable investments allows you to enjoy your retirement years free from being overly concerned or affected by market fluctuations
  • You need this income strategy 10+ years in advance of your retirement

If this post has sparked your curiosity, please schedule a complimentary, no-obligation consultation with us where we can describe this approach in detail and answer any questions you may have. We can also show you examples of how this flexible strategy can optimize your Social Security benefits and overall retirement income and meet other financial goals such as efficiently self-funding a long-term care event and leaving a financial legacy if desired.

We would also love your feedback on our recent posts, including what topics you would appreciate us covering next. Please visit us