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Recently, we had the finale of the\\xa0Retirement Plan Live series, so I want to share my observations on what we can all learn from Rosie\\u2019s experience. There was a lot to unpack from Rosie\\u2019s plan. Before we get to the Listener Questions segment, I\\u2019ll share my thoughts with you.\\xa0
Make sure to stick around after the listener questions to hear the Bring It On segment with Dr. Bobby Dubois. You\\u2019ll hear about building energy in retirement through your emotional, cognitive, and social well-being. Learn how to use these powerful ways to live longer and stay healthier in retirement.
Rosie recently shared her retirement plan with all of us in our Retirement Plan Live series. This is a very public way to plan for retirement, so she was brave to put herself out there to share her situation openly. Unfortunately, Rosie\\u2019s current trajectory is not feasible and she and her husband are on track to run out of money within ten years.\\xa0
Coming to this understanding while live in front of 1000+ people is incredibly difficult, but now she can correct course to get back on track. This wasn\\u2019t only a learning experience for Rosie, it was for me as well. Here are a few of my takeaways from this experience.\\xa0
Rosie retired in mid-2021 in the middle of a bull market when interest rates were zero. She was working with a financial planner, so there were projections that showed her plan was feasible. However, there was nothing done to make that plan resilient in the face of challenging circumstances.\\xa0
Her withdrawal rate did not match up with the assets they have and nothing was done to compensate when the sequence of return risk reared its ugly head. Without resiliency designed into the plan, it fell apart quickly. They are now in a position where they have to make some tough decisions.
A feasible plan is like a lit candle. It can burn; however, a gentle breeze will blow it out. Having a resilient plan is like having a fire. When a wind comes by it won\\u2019t go out\\u2013it may even gain more strength with the added fuel.
Going into retirement Rosie and Dwayne were invested in 75% equities. Since they were already constrained as they approached retirement, they needed to be a bit more conservative. Their monthly systematic withdrawals came directly from selling those equities and they had no decumulation strategy. The result is that they are now underfunded.
Even though Rosie and Dwayne were using a certified financial planner, they still got blown off course. A financial advisor is similar to a general practitioner in medicine. They are not retirement specialists, so they may not understand how to build resiliency into a retirement plan. A retirement planner goes deeper on how to create a decumulation plan that has resiliency built in. They also understand that selling equities to meet withdrawals doesn\\u2019t work in a constrained retirement situation.\\xa0
It was clear that there were communication issues between Rosie and her advisor. She assumed there was safe money set aside somewhere while there wasn\\u2019t. This incongruence between what she thought and what her advisor understood has also contributed to their current situation.\\xa0
While Rosie had conversations with her advisor, they were surface-level, and she didn\\u2019t pose follow-up questions to help improve her understanding of the situation. She didn\\u2019t understand the decumulation plan to create her retirement paycheck. This vital detail was missing. One year into retirement and her retirement plan fell apart.\\xa0
Both Rosie and Dwayne took Social Security early so that they could try and preserve their assets as long as possible. This was always what they had planned, so they never considered anything else. Had they carefully considered a different strategy for filing for Social Security, it may have made a difference in their trajectory.\\xa0
Have you listened to the latest Retirement Plan Live series? Did you attend the results webinar? If you missed it check out the\\xa0replay.\\xa0
The Retirement Plan Live replay
Roger\\u2019s YouTube Channel -\\xa0Roger That
BOOK -\\xa0Rock Retirement\\xa0\\xa0by Roger Whitney
Roger\\u2019s\\xa0Retirement Learning Center
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