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How many of you remember the merry-go-round from your childhood playground?  Perhaps you were one of the children yelling for it to go faster, all while holding on tightly.  Or perhaps you avoided it all together at the risk of feeling sick!  Sometimes life can feel like the merry-go-round, spinning out of control.  Not every situation is as easy as simply putting your foot down on the ground to make the ride stop, but It can be easy to forget to focus on the things we can control.

Consider retirement, one of our most frequently discussed topics.  We gather a lot of data, “crunch the numbers,” and collaborate with you to discuss the likelihood of successfully meeting your goals.  Some of the data we gather you have complete control over, such as how much you are saving versus spending currently or the asset allocation and diversification of your portfolio.  A portion of the data we gather you have some control over, such as your earnings and the duration of your employment, and your longevity.  In these areas, we set goals, such as estimated retirement age, and we like to be optimistic about your longevity!

However, some of the data we enter you have NO control over.  Government policy, such as taxes and benefits, is subject to change if Congress is in session, and stock market returns are unpredictable.  Over the long term, markets are positive, but the return could be up or down in any given year.  On average, you may earn 5% per year, but the sequence of those returns could come in various ways.  Retiring during a bear market (ex. 2001 or 2008) gives a different outcome than retiring in a bull market, even if the two portfolios individually average 5%.  Despite the uncertainty of these things over which you have no control, it may be comforting to recognize many factors you DO control that contribute to your long-term success.

Prior to Retirement:

Analyzing your situation currently (and on an ongoing basis) allows you to adjust as needed to meet your objectives.  If it appears you are not on track, there are steps you can take:

  • Save more / spend less.
  • Prepare your portfolio in advance to meet your retirement needs, which may include taking less risk.
  • Tax-diversify your portfolio. Too often, we see clients with all their assets in tax-deferred retirement accounts where withdrawals are taxed at ordinary income rates.  By utilizing other account types (ex. non-qualified accounts and Roth IRAs), you provide tax flexibility for yourself as policies change.
  • Consider any advantages to working longer or easing into retirement by working part-time for a while.

And to enjoy those retirement days, even more, start taking care of yourself now to benefit your health.

During Retirement:

As things out of your control happen, focus on what you CAN control:

  • Use your asset allocation and location to your advantage. Has tax policy changed?  Consider the source of your withdrawals.  Have stocks entered a bear market?  Use your allocation to your advantage.  You may be able to draw down cash and/or fixed income for withdrawals first, prior to selling any stocks at a low point, and thus allow them time to recover.  Utilizing a rebalancing strategy also helps you maintain your target risk profile.
  • Consider any adjustments to spending that may be needed. If vacation was not already in the budget, it might make sense to delay it for a short time.

And of course, meet regularly with your advisors to discuss changes and ensure you are still on track to meet your goals.

A wise man once told me he worried very little about things over which he had no control.  It makes sense, although it can be hard to implement, easier said than done.  Nevertheless, we can make a change for the things we can control and, therefore, alter the outcome or source of our stress and worry.  And as mentioned in previous articles, for all the unexpected life events and things we cannot control, it is important to develop a comprehensive plan utilizing all the tools we DO have.  If you need help creating a plan or taking control of your financial life, Bridgeworth is here to assist.


2021 JP Morgan Guide to Retirement

This content does not constitute legal, tax, accounting, financial, or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals based on your specific circumstances. We do not make any warranties as to the accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

This material is not intended to be relied upon as a forecast, research, or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of May 20, 2021, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Bridgeworth, LLC to be reliable, are not necessarily all-inclusive, and are not guaranteed as to accuracy.

Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not ensure against market risk.

The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

Any securities, indices, and other financial benchmarks shown are provided for illustrative purposes only and reflect reinvestment of income, dividends, and other earnings. They do not reflect the deduction of advisory fees. Investment products are subject to investment risk, including possible loss of the principal amount invested. You cannot invest directly in an index.


Bridgeworth is now a part of Savant Wealth Management as of 11/30/2023. Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois.