As More Americans Face Early Retirement, Financial Consultant Steve Sexton
Shares Important Risk Management Tips
Online PR News – 14-April-2021 – SAN DIEGO, CALIF. – According to U.S. Census Bureau data, the age of retirement in America averages 63 for women and 65 for men. However, since the pandemic, more than a quarter of workers have had to move up their retirement dates. Steve Sexton, financial consultant and CEO of Sexton Advisory Group in San Diego, California, is addressing the top three retirement risks Americans should be prepping for right now.
1. Sequence of returns risk.This is the risk associated with the order in which investment returns may occur. “Most people have a retirement income plan that rests on social security, pensions, and savings,” explains Sexton. “However, with social security uncertain and pension less common, most people will mostly depend on savings.Here’s the issue: Should the market take a downturn when you retire, the sequence of returns risk can have a negative effect on your retirement because your assets likely won’t have time to rebound. This is why it is crucial to work with a financial professional who can advise you on the proper investment tools and strategies to keep you protected.”
2. Market risks. According to Sexton, any investment can only have two of the following three things: 1. Growth 2. Safety 3. Liquidity. To help minimize your market risk in retirement, he recommends following the “Rule of 100.” “Take the number 100 and subtract your current age.The resulting number is the percentage of assets to put toward stocks.The remainder should go to safer investments,” says Sexton.
3. Risk of longevity. In order to ensure retirees, have adequate funds to last an entire lifespan, Sexton recommends a comprehensive income and investment plan using two main strategies of protection. First is the use of individual income streams in the form of fixed index annuities and/or indexed life insurance. Second is the strategy of drawing down assets to protect against sequence of returns risks, which involves spending down lower earning and taxable assets first and tax-deferred, higher earning, and tax-free assets last.
For more information on Sexton Advisory Group, visit https://www.sextonadvisorygroup.com/