Recently retired

Published: 3/23/20

Recently retired

Recently retired individuals and those nearing their time to retire are suddenly flooded with unexpected market losses care of COVID-19. This leaves many who recently retired wondering if they’ll have to return to work, and those planning to retire soon considering if they need to push plans back. If you are in either of these two groups it’s time to evaluate your positioning.

Now, you may be asking “do I need to change plans?” and you wouldn’t be alone in asking that question. However, the honest answer is: it depends. Because everyone’s situations, wants and needs are different the question is impossible to answer without additional information. Think of it this way: you bump into your neighborhood physician, mention in passing that you’ve had a few symptoms and ask what is wrong with you. You’ll be told to either make an appointment or seek immediate medical attention. The reason for this (and why our article can’t fully answer the question) is because it would not be in your best interest to have someone diagnose you physically or financially “off the cuff” without proper testing. But let’s take a look at some scenarios and discuss if they need immediate attention or an appointment:

1: Your retirement planning only involved electing your 401(k) savings amount and what investments to buy within the account.

Seek immediate attention.

There are two skill sets that it takes to have a successful retirement. The first is accumulation, aka retirement saving. The second is distribution aka: income/withdrawal planning. Both present challenges however, withdrawals have significantly more variables to plan for. It would be worth the time to sit with a professional to see where you stand.

2: Your retirement plan uses a “bucket” strategy or you have significant cash reserves.

Set an appointment for a check-up

The “bucket” strategy approach constructs 3 separate accounts: cash (right now), bonds (a little later), and stocks (growth/long-term) to purposefully prepare & visualize each accounts purpose. Similarly, a larger cash reserve will also allow you to have the flexibility while riding out volatility. It’s important you review either of these to ensure you have proper positioning across your net worth. Recently retired individuals may enjoy the spoils of having cash on hand now, but considering current interest rates and long-term inflation against cash. Make sure to rebalance the buckets.

3: Your increasingly concerned about if you will be ok (for both the pre & post-retiree).

Seek immediate attention

First, we don’t ever want anyone loosing sleep because things feel “unknown”.  The recently retired investor may have some panic looking at the years ahead while starting in a downturn. Piece of mind goes an extremely long way. Much like someone who waits to see if their symptoms will pass, its better to get ahold of things before they progress. There are many different things an experienced professional can consider and use to help. But if left without attention, it can compromise the amount of options that you have if any.

4: You’ve recently retired and have started to take money out.

Set an appointment for a check-up

(If you haven’t professionally set a plan seek more immediate attention)

So this one has two different attention levels because if you have planned this is still an important time to team with your planner to regroup. If you haven’t planned, it’s worth your time to ensure that you aren’t causing any future problems. A professional will be able to account for the sequence of returns risk, taxes, inflation and additional setbacks that you may have missed.

5: 50% or more of your retirement relies on your savings/investment accounts.

Seek immediate attention

If half of your monthly expenses or more rely on checks from your investment accounts running out of money is not an option. Because of the larger reliance on these accounts there is limited flexibility to make lifestyle changes to lower expenses. It also means that as prices increase over time (inflation) your reliance on the savings will grow. Pensions don’t traditionally offer cost of life (COLA) adjustments, and the COLA for social security does not make significant strides to cover this gap.


We understand that these are extremely trying times both financially and emotionally for most people. Although it may be intimidating, it makes the most sense to know where you stand and if any action is necessary. A little planning can go a long way in these times, and together we are here to help. Schedule a Call With Us to review your situation.


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