Does Your Retirement Portfolio Fit You? How much Risk do you Really Want?


If you’re not unsettled after the stock market action of early October 2018, then you weren’t paying attention. The Dow Industrials were gaining and losing several hundred points, not daily but hourly!1

This is not an accident. It’s all part of the more-volatile, more uncertain stock market environment that we started to enter back in February of 2018.

Therefore, retirees should be thinking about a safer money approach to retirement strategies… one designed to help preserve and protect your wealth and leave a legacy to your loved ones.

History repeats itself

Regrettably, in the more than two decades I’ve been in this business, I’ve seen this happen over and over again; some people will get careless and aggressive at exactly the wrong time.

At market highs, like we have today, many people will put all their money into the market and focus solely on the high yields a company is paying out – without calculating whether those yields are really sustainable.

Warren Buffett has been quoted as saying the return of your capital is more important than the return on your capital, and this is especially true for a retiree!2

Now, after 9 long years of a bull market fueled by countries cutting interest rates across the world and propping up their economies with trillions of dollars of stimulus, we’ve had an unprecedented relative calm period in the stock market… and it seems that people are doing it all over again.   This relatively calm period in the stock market has regrettably and predictably led to people taking on more risk than they should at this time.3

For example, this calm period might lead people to believe that riskier investments such as dividend-paying stocks are “safe” investments. However, stocks are designed for growth and non-guaranteed dividends, but they are not designed for the safety of principal.  In my Kiplinger article “Are Blue-Chip, Dividend-Paying Stocks Safe,” I remind retirees there is no such thing as a good stock in a bad market.

We’ve all seen this happen before with the real estate bubble in the mid-2000s and the tech stock bubble in the late 1990s. Now we have the global bubble that I call the Central Bankers Bubble.  And we’ve seen this movie before: sky-high real estate prices, sky-high stock prices, and the Fed raising interest rates, and we know how this movie will end… we just don’t know when.

Rising interest rates are historically the pin that bursts a debt-fueled bubble, as I wrote earlier this year in my Kiplinger article “What is the Central Bankers Bubble and Will It Burst?”  You should know that interest rates in the U.S. have doubled over the past year!

Demographics Drive Our Economy

The demographics in the U.S. are not pretty because of the aging of the baby boomers.  Today, baby boomers are hitting age 65 and retiring at the rate of over 10,000 people every day! That’s right, over 10,000 people per day are turning age 65 in the U.S. daily!   And this will continue for 11 more years as the 77 million baby boomers age into retirement.4

The main concern with an aging population is that, on average, retirees spend the least amount of money during their retirement years as compared to the rest of their adult lives.

It’s interesting to discover that what people spend their money on and how much they spend is actually predictable based on the age and stage of life they are in. The typical consumer spending life cycle goes through the following six stages:

Stage 1:  Ages 18 – 22: College.  At these ages you’re young, in college, not making any money and thus aren’t spending a lot.

Stage 2:  Ages 22 – 30: Marriage.  You’re working, getting married, making more money and spending more money.

Stage 3:  Ages 31 – 42: Children. You now have children and children are expensive! You’re making more money and spending more money on those children.

Stage 4: Ages 46 – 50: Your Children are in College.  Your children are in college and college is very expensive, so your spending goes up again.  Your income typically is increasing as well.

Stage 5:  Ages 50 – 60: Empty-nester stage.  Your spending drops dramatically for 2 reasons: No. 1 Finally, the kids are out of the house and self-sufficient (hopefully!), and No. 2 you realize that you’re only 10 to 15 years from retirement and you have to start saving much more to be able to stop working one day and retire. So spending drops dramatically for empty-nesters.

Stage 6: Ages 60+: Retirement.  Unfortunately, most Americans have little saved for retirement so they rely on Social Security and maybe a small pension to fund their entire retirement.5  What this means is that the average American will be cutting back their spending at retirement. This might include downsizing their homes and taking money out of the market instead of putting money into the market as they were doing during their working years.6 7

The major problem with this decreased spending is that America is a consumer-spending economy! Consumer spending makes up 68% of our economy!8 So what do you think will happen with the 77 million baby boomers aging into retirement and cutting back their spending dramatically?

The United States is not the only country that has concerns. Chinese real estate is the “Biggest Bubble in History,” according to China’s richest man.9  China also announced in October 2018 that its economy grew at its slowest pace since early 2009.  The trade dispute with President Donald Trump isn’t helping the situation.10   Many European country’s financial soundnesses and the future of the European Union could create substantial worries as well.11

So are all of the above facts starting to get you concerned about those non-guaranteed corporate stock dividends and sky-high stock valuations?

In light of these aging population tailwinds and worldwide events that could affect your retirement plan, it’s imperative to protect a retiree’s wealth at this time.

Safe Money Management Makes Sense to Retirees

That’s why now, more than ever, it’s imperative for a retiree to practice safe money management if their goal is to preserve and protect their retirement assets.

Many people lost a tremendous amount of money when the tech bubble burst and again when the real estate bubble burst, but the difference now is that my millionaire retired clients don’t have time on their side to weather another major downturn. A retiree really wants to know what is their “holy crap” number.  Do you really have the stomach at this point for potential big losses again?   Especially when you need to live on that money for the rest of your lives?

Does your Retirement Portfolio Fit You? How much Risk do you Really Want?

With all of these factors in mind, for a retiree looking to preserve and protect their wealth, we use a very powerful Nobel-Prize winning based software called Riskalyze. Riskalyze helps us figure out exactly how much risk a retiree wants to have, and then shows them exactly how much risk they actually have in their retirement portfolio.

Riskalyze also tells us how much in fees a person is paying. Higher fees can be a big drag on stock market performance so it’s important to avoid paying high fees.

Lastly, you should know that I have a “Series 65” securities license which means I am held to the Fiduciary Standard. This means that if your goal is to have a “Moderately Conservative” portfolio with a Risk Number of 42 (out of 99), my compliance team and I make sure that your portfolio with me is a Moderately Conservative portfolio and continues to stay that way. My clients don’t want any more surprises at this point in their lives.

Preserve and Protect Your Retirement Assets

In this new world, we find ourselves in, it’s vitally important to make sure that your retirement plan fits you. The right amount of risk, the right amount of diversification, and the right team watching your back. For over 25 years we’ve been that team and are looking forward to working with you and your family as well.

You can learn more by attending an upcoming complimentary dinner workshop at Ruths’ Chris or Abe & Louie’s Steakhouse in Boca Raton or Fort Lauderdale.  This workshop is best suited for those over age 60 with between $500,000 to $10,000,000 or more in investable assets. Call our office to register now at 1-800-807-5558 or visit us at

Sources used


Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Stuart Estate Planning Wealth Advisors have not affiliated companies. Stuart Estate Planning Wealth Advisors is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products. Neither the firm nor its representatives may give tax or legal advice. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Any media logos and/or trademarks contained herein are the property of their respective owners and no endorsement by those owners of Craig Kirsner or Stuart Estate Planning Wealth Advisors is stated or implied. 636880

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