Beating Sequence Risk in Retirement
Retirement can be a joyful milestone for many, but the prospect of entering retirement during a bear market can create anxiety for some. To address this, you can allocate a portion of retirement savings to clear essential expenses through investment products that offer guaranteed income, such as annuities. The remaining funds can then be allocated to riskier investments, such as stocks, to cover non-essential expenses like vacations or hobbies. Sequence risk, or the concern of experiencing negative returns early in retirement, is a significant consideration for retirees. We suggest a proactive approach to mitigate this risk, ensuring that sources other than market-based investments cover precise income needs. Additionally, we recommend exploring annuities to transfer some risk to an insurance company. Collaboration with a professional is also emphasized to navigate these potential risks. A helpful framework for managing restaurant savings is to visualize them as three distinct pots: near-term, medium-term, and long-term. NEAR TERM Money intended for immediate expenses. Near-term savings should be invested conservatively in a bank-money market account. MEDIUM TERM Money needed in five to 10 years. Medium-term savings can tolerate slightly more risk for potentially higher returns. LONG TERM Long-term savings are not anticipated for at least a decade, but they can benefit from tax-advantaged accounts like Roth IRAs. Aligning time horizons with appropriate account types and investments is crucial for maximizing this approach. For example, municipal bonds in a taxable investment account may be suitable for the medium-term pot, while a Roth IRA could be ideal for long-term growth due to its tax-free benefits. By strategically allocating retirement sayings and seeking professional guidance, retirees can better handle market uncertainties and enjoy a secure financial future. We understand that each retirement journey is unique and requires tailored situations. We strive to guide our clients through crafting a customized retirement plan aligned with individual goals.
TAKE A BREAK
BAKED SWEET POTATO FRIES
INGREDIENTS
• 2 large sweet potatoes, cut into wedges • 2 tbsp olive oil • 1 tsp smoked paprika
• 1/2 tsp garlic powder • 1/4 tsp cayenne pepper • Salt and pepper, to taste
DIRECTIONS
1. Preheat oven to 425 F and line a baking sheet with parchment paper. 2. Place sweet potato wedges in a large bowl and add olive oil, paprika, garlic powder, cayenne, salt, and pepper. Toss to combine. 3. Arrange the sweet potato wedges on the prepared baking sheet in a single layer. 4. Bake for 20–25 minutes, flipping halfway through, until golden and crispy.
PATRIOT WEALTH | 919.322.4113 | P3
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