Bridgeriver LLC - January 2020




Do Your Retirement Accounts Have Purpose?

Evaluate Your Portfolio for 2020

It’s a big question to ask. Think about your retirement accounts: Are they serving the purpose you intended? When you invest money, you do it for a reason. Every dollar you invest should have a purpose. For many retirees, the purpose of their retirement accounts is to support them during their retirement. It’s money they can rely on over a potentially 30-year period. But some people don’t look at the big picture. For example, you could divide your whole retirement portfolio into three main groups: emergency money ("mad money"), income, and growth. (Growth is whatever is left over after filling the first two buckets.) Each bucket has its own rules. Here’s what that looks like. The first group — “mad money” — is your liquid assets. It’s the money you have quick and easy access to. My mom called it “mad money,” and that stuck with me. This is money you can use for emergencies or anything else that might come up from month to month. The amount of mad money you have is based on your specific needs to act as a buffer. It’s the money you keep in your banking or savings account. You can also call it “sleep at night” money because it lets you rest easy since it’s there if you need it quickly. The second group is your income portfolio, which pays you dividends or income. In retirement, this is the money you live on above your social security and pensions. If you sell anything in this portfolio, you can usually expect your income to drop accordingly. Your portfolio is built on strategy and is, again, based on your needs. If you need more money, you can make the proper adjustments.

The third group is what’s left over. Maybe you put that “extra” money into the stock market. This can serve you well if you don’t need access to that money on a short term basis. Especially if inflation kicks into high gear, the stock market works best for long-term investing. With its constant ups and downs, if you’re looking for quick investing, you should look elsewhere. Alternatively, you can also set up accounts to donate excess income to your favorite charities and get a nice deduction for doing so.

On the flipside, if your retirement accounts are not serving their purpose and you’re short on income, you may need to sit down with your investment professional or give me a call at 248.785.3734 to re- strategize your approach to retirement. We’ll help get you back on track and make sure that your accounts are indeed working for you.

-Dan Casey



Made with FlippingBook Annual report