ABOUT HOSTS

Jeff Wille
ABOUT Jeff

With over a decade of experience in wealth management and financial services, Jeff has a well-established track record of fostering relationships with clients and delivering comprehensive financial planning advice tailored to the unique needs of individuals and families. Before joining Pure Financial Advisors, Jeff worked with high-net-worth families, foundations, and endowments at a multi-family office [...]

Careful planning during the Retirement Risk Zone is critical for a healthy financial future. Pure’s Financial Advisor, Jeff Wille, CFP®, AIF®, describes what the Retirement Risk Zone is, why it matters, and what you can do to protect your hard-earned savings during this crucial stage.

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Transcript

When it comes to retirement planning, many people focus on saving and investing during their working years. But there’s a critical phase of retirement planning that often gets overlooked and it’s called the Retirement Risk Zone. If you’re within five years of retiring or recently retired this period is the most important and potentially the most vulnerable time for your financial future.

What is the Retirement Risk Zone?

The Retirement Risk Zone refers to the five years before and after you retire. It’s a pivotal time when you’ll be making important decisions, such as:

  • Settling on the right retirement date
  • Choosing the best time to claim Social Security
  • Transitioning to Medicare
  • Determining how much income you can safely withdraw from your portfolio.

During this time, you’re likely shifting from building your savings to withdrawing them. If the market takes a significant downturn early in your retirement and you’re withdrawing funds to cover living expenses, it could permanently impair your portfolio’s ability to support your income needs—even if the market eventually recovers. This is known as sequence of returns risk, and it’s one of the biggest challenges retirees face.

Think of retirement like climbing a mountain. During your working years, the ascent, you’re focused on building wealth and saving for the future. But as you approach the summit, the Retirement Risk Zone, the stakes are highest. One misstep during this stage, such as withdrawing too much in a down market, can jeopardize your entire journey. The goal isn’t just to make it to the top but to descend safely and stress-free.

So, how can you protect yourself during this critical time? Here are three essential steps:

  1. Diversify Your Investments
    A well-diversified portfolio can help reduce risk and provide stability during market downturns.
  2. Create a Withdrawal Strategy
    This includes determining which accounts to draw from first and pacing your withdrawals appropriately.
  3. Establish a Safety Net
    Keep a few years’ worth of essential expenses in low-risk assets like cash or short-term bonds. This provides a buffer during market downturns, so you’re not forced to sell investments when values are down.

Being prepared can help you prevent getting caught in the risk zone. If you would like to find out if your retirement plan may be at risk or want to ensure you’re on the right track schedule a free financial assessment.

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IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.

• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• 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.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.

AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.