• Darryl Rosen

Is The Light Keeping Your Up At Night?

Has this ever happened to you?

After months of work your long-awaited vacation has arrived. You and the significant other are finally getting some time away. Dinner was wonderful and the show was mesmerizing. Perhaps the nightcap was unnecessary but that’s a different story.

In the morning: No alarms, no responsibilities…no children.

As the sun rises, you slowly begin to feel the sun’s presence. Slowly at first, but now it’s shining through the curtains. The very curtains you remember closing last night. But, now, the sun is hitting you right in the eyes. It’s nearly impossible to sleep, and although the covers are warm and removing them is the last thing you want…

…Somebody must close the drapes.

Unfortunately, the drapes won’t close all the way. For some reason as if it’s written in The Dummies Guide for Hotel Construction manual…no matter what you do and as hard as you pull on each side, you just can’t seem to get the curtains to close to prevent that growing speck of light from illuminating the room.

Have you been there? (Incidentally, if you google closing hotel curtains, there are all sorts of interesting remedies.)

Anyway, this is exactly how I view the years to lead up to retirement!

(Please allow me a little latitude here!)

You may know this or not, but there is a gap between the period of your life when you’re accumulating assets and the time of your life when you de-accumulating (or spending down) those assets.

It’s the time in your life were questions previously ignored and avoided are now front and center. Suddenly, there is a light shining on your future and, in some cases, it’s affecting your sleep.

  • How will market volatility affect my retirement?

  • Is there a way for me to pay less tax? What if I pay too much tax?

  • Should I be concerned with inflation?

  • Will I outlive my money?

Mostly, what will happen when I no longer a regular paycheck?

It’s these questions – these concerns – that interfere with your ability to sleep. To rest. To relax. Figuratively, these burdens are the little specks of light that keep many people up at night.

Retirement distribution planning helps close the curtains if you will.

This much is certain. The skills you used to accumulate wealth are different from what you must know to efficiently liquidate wealth. Yesterday a student in my retirement class told me his advisor said not to worry about de-accumulation. That above average rate of returns would keep the light out – so to speak.

I was shocked because that statement is simply not true.

In retirement, average returns aren’t nearly as important as when those returns occur. Negative returns at the beginning of retirement can be devastating. That’s just one example. There are many others.

Closing the curtains is about effectively transitioning from accumulation to de-accumulation. About transforming from uncertainty to certainty. Moving from a vague notion of how to navigate this period of your life to having concrete steps for making the best decisions when they matter the most.

You’ll be best served if your retirement advisor understands this.

That’s just the way it works!

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