Protecting your retirement plan: Why I no longer ride rollercoasters
I’ve always been afraid of heights but when I became engaged to my wife, I found myself on amusement park rollercoasters. Our first rides together were during a trip to Williamsburg, Virginia. It was fun and a lark to be zooming up and down and left and right at an unnecessary speed. What did we have to lose? And, besides it was a quick thrill. Now older and I like to think wiser, I’m happy to watch as other riders get their thrills.
Investing has parallels
The last couple of months have been quite a thrill ride for investors with the major market indices chalking up record one-day declines followed by an occasional record gain. This is not the kind of stock market most retirees want to experience as they approach a big life change like retirement especially after enjoying generous returns in 2023 and 2024.
Planning ahead
Hopefully you’ve been planning for your retirement day for years. You’ve maxed out your 401(k) contributions, paid off your mortgage, made some good investments in real estate and launched your kids into independent adulthood (well, we can wish for the last one, right?). It wasn’t easy but you did it. Over the years the markets went up and down but you were diversified and kept adding to your investments along the way. Now a milestone (e.g., retirement) has arrived.
Here are three retirement planning phases:
Get ready (3-5 years out)
In advance of retirement you should be thinking about the following:
· Where do I want to live in retirement?
· How do I want to spend my time?
· How am I going to replace my paycheck?
· How much am I going to need—each month and in total—over my lifetime, adjusted for inflation?
· Am I properly invested now for my age and comfort level with risk?
It’s closing in (1-2 years out)
· Have I created a cash “bucket” to fund my lifestyle expenses?
· What employee benefits, health insurance, pensions or Social Security will I be utilizing in retirement, if any?
· If I’m going to work in retirement, have I “tried out” that work in advance?
· How do I plan to stay active and healthy?
· Am I properly invested now for my age and comfort level with risk?
It’s time to retire (my last day day)
· Have I created an income and spending plan based off known transactions with an additional amount for unexpected or unplanned expenses?
· Have I established automatic deposits into my checking account?
· What are the first five things I want to do after my last day at work? Do I have a calendar of events and activities planned?
· Am I properly invested now for my age and comfort level with risk?
Retirement plus 2 years
· Am I spending my time on the things I want in retirement?
· Do I have the daily routine that I envisioned, pre-retirement?
· Have I re-calculated what I need to cover my expenses in retirement, including unexpected expenses such as health-related expenses?
· Am I properly invested now for my age and comfort level with risk?
You’ll note that the last bullet in each section is the same—Am I properly invested now for my age and comfort level with risk? Being properly diversified across multiple asset classes is a mainstay of investing but updating it as you navigate into this new phase is equally important.
When you haven’t planned ahead
Not everyone has gone through the above exercise to get ready for retirement. There can be a number of good reasons for that—a personal health issue, a family emergency, a premature departure from employment, etc.
All is not lost!
If you have not planned for retirement and you’re worried about the current market environment, it’s not too late to make some good decisions. Give me a call.
Although my interest in rollercoasters is now limited to tamer rides like the Yankee Cannonball at Canobie Lake Park in Salem, NH, I still enjoy the ride—just not the ones that can send me into cardiac arrest!
As with life, your investment approach should change over time and reflect changes in your personal situation. You can still invest for thrills when you are near retirement, but it usually needs to be more limited.1 By managing risk, you should be able to protect your retirement portfolio thereby ensuring a secure retirement.
If you want to plan a successful retirement, give me a call. I’m here to help. You can schedule a quick call with me by clicking HERE.
Lyman H. Jackson
Lyman@PlanWithFPS.com
617-653-3303
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1Don’t forget that most people will need to invest and grow their portfolios over multiple decades in retirement. As such, remaining invested is key to generating the growth and long term returns needed to fund a comfortable retirement.
©2025 by Financial Planning Solutions, LLC (FPS), a Registered Investment Advisor. Reprinting or redistribution only by permission. This blog was written by a professional with 30 years’ of real-world experience in finance. AI did not write this article. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client after entering into an advisory relationship. The information herein includes opinions and forward-looking statements that may not come to pass. Information is derived from sources believed to be reliable. Information is at a point in time and subject to change without notice. Such information may not be independently verified by FPS. Please see the important disclosures link at the bottom of this page