The Big Boom

Since January 1st of this year (2011), it’s estimated that every single day more than 10,000 Baby Boomers will reach age 65. This will keep happening every day for the next 19 years!

Over 30 percent of U.S. investors in their sixties have more than 80 percent of their 401k invested in equities.

Approximately three out of four Americans start claiming Social Security benefits the moment they become eligible at age 62.

Over the last decade at Windsor, we have noticed a trend with retirees regarding the goals and objectives of their retirement savings. We’ve noticed a shift towards income-producing investments. In the past, traditional investment philosophy was for a retiree to keep a larger allocation in equities, and to “sell-off” a portion each year to take care of spending needs. We see two major factors influencing this trend.

First, people are staying healthier longer, thus living longer. The active lifestyle of a retiree is directly correlated to their need for cash flow. Baby Boomers do not want to give up the income they enjoyed during their working years, so having monthly cash flow from dividends and interest provides the “paycheck” that they were accustomed to.

Secondly, two unforgiving stock market downturns over the last ten years have forced retirement assets into more conservative investments. Knowing that a dramatic stock market decline can erase years and years of savings in a matter of months keeps retirees on more conservative ground. Everyone knows the stock market takes the stairs up, but the elevator down.

We want our clients to use their cash flow. You should enjoy the retirement that you’ve worked and saved for all those years. We’ve seen two types of retirees, those that want to only spend the earnings from their nest egg, preserving the capital for beneficiaries, and those that have the “die broke” philosophy, which is to have their very last check go to the funeral home…..and bounce. Finding your “comfort zone” between these two extremes is an important key to enjoying a stress-free retirement.

20860 N Tatum Blvd. Suite 220, Phoenix, AZ 85050  | 480.515.3514

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