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So, we want to leave investment money invested. That’s why investing is a long-term time horizon kind of proposition, but income is not. Hi Peter. Hello everyone. Welcome back. We hope you are all history fans because we’re going to take a deep dive talking through 76 years of headlines, what market history teaches us about staying invested. From oil embargoes to global pandemics, the S&P 500 has endured decades of uncertainty and come out stronger over time. So, we’re going to break down historical data and talk
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through whether pre and post retiree should make any changes to their portfolio. So, I do want to start by taking a look at this interesting chart, Peter, which shows decades of market history. What stands out to you about how the market responds to major global events? Yeah, well, I am a history buff and I also obviously in into numbers. So, 76 years from where we are today here, going back to like 1950 would put us in the Korean War kind of kind of era there. And we’ve experienced crazy times
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along the way. And and the market has reacted, but also remained resilient. I mean, but you think about where we are, right? We controversial president caught caught in controversy, hostilities in Iran, surging gas prices, inflation, market volatility. The 1970s were a pretty wild time, right right, Erin? I [laughter] thought you were going to say something else. Yeah, no, it’s okay. We we we’ve seen this before. Yeah, no, not talking about today, although it does, you know, history does not repeat, but it often
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rhymes has been said. And since we we are talking here today in 2026, but we archive these and I hope that this statement remains true until 2036 or whenever somebody maybe watching this, but despite these different global geopolitical disruptive events, the market has remained resilient. And and we’ve certainly seen it react. The dot-com bubble and the Great Recession and COVID for more recent type type of of memory events, but we’ve seen reaction. However, the market has not only always come back, it has always
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surpassed previous highs. It’s do you have the time and do you have the stomach to stick with it. And that’s what we need to be cognizant of when we are aligning our investment direction, Aaron. That’s the most important thing to me. Right, but that being said, I feel like a lot of us hear that the best advice is always staying invested, staying the course. But if I feel uneasy about how I’m invested, when is the right time to make changes to my portfolio? You you should address your
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uneasiness. Now, we we sort of have coined a phrase that planning prevents panic. And if we have the plan aligned correctly and you understand what your money is doing, then hopefully we can address that uneasiness. We are not going to avoid market volatility. In fact, volatility is part of being invested in the market. We will experience it. It’s how do we stomach it? How do we make our way through it without making emotional knee-jerk reactions? And if properly positioned, if the exposure to potential volatility
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is part of the plan that we’ve laid out. How maybe, maybe do we even take advantage of market volatility? But we don’t want to be so nervous about it that our our emotions, our mood, our day-to-day is impacted by the direction of the market, and we certainly don’t want to make decisions about our market exposure after the fact in the midst of market volatility. That is a decision that we need to make consciously before we experience market volatility. So if you’re feeling uneasy about your
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exposure to risk, the time to address that is now. And oh, by the way, yes, we have seen some recent market volatility, but we are still within range of all-time highs. And and and this is a good time because, you know, we still have the advantage of the last 5, 10, 15 years of remarkable market gains that we can take advantage of if we are feeling uneasy. And a lot of people, probably because of those remarkable market gains, Aaron, are actually taking more risk than they are comfortable with or
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should appropriately be exposed to. And again, the time to address that is now. Mhm. And as, you know, we talk through feeling uncomfortable and possibly making any changes, how does the answer change for someone who is nearing retirement or recently retired? Well, when you are in your 20s and 30s and 40s, you can probably set your allocation and it’s good for a while. You know, be be pretty aggressive with that money that you you are investing because it’s a long, long-term time horizon, which investing
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should always be. But as you get to your 50s, maybe that time horizon is not as long as it once was. It starts to shrink a little bit, and we therefore should monitor and adjust and realign our risk exposure more often. And that’s not saying that we’re doing this every day because a lot of times not paying attention to the day-to-day movement of the market is is actually more mentally, emotionally, and psychologically uh doable for for investors. But, we should be paying attention more often
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and probably tone down that risk because at that point in time we’ve built up the majority of the life savings. We’ve had the benefit of growth and compounding for decades. And maybe we just don’t need or want to take as much risk with what we’ve built up. Now, new contributions that we’re making, maybe we should continue to to be a little bit more aggressive with those and push the upper edge of our risk comfort level. But, with the life savings that we’ve built up over two and a half, three,
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four decades, we probably don’t want to be and can’t afford to be, not as appropriate to be, as risky with those assets. We want to begin to position those more in the preservation um stage, preserving, protecting, and beginning to plan out how to make distributions and actually utilize all those dollars that we’ve built up to create income. Mhm. So, you’ve mentioned the word risk a lot and I feel like we can’t have this conversation without talking about sequence risk, right? For
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people who are recently retired, a down market presents a unique challenge. Explain this, please. >> Yep. Well, this is this is where we flip phases and now are creating income. We went from being investors to being uh sellers of assets, to to taking withdrawals. And the thing about averages, actually a couple things about averages. Averages are not predictable nor dependable. Averages are the results of extremes, right? That that number that we hear of this is the average market return. That’s not what the
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market is going to get almost probably never right on the dot. The average is the result of many extremes over time. So, we can’t depend on averages. But, the other thing about averages is that if we are just looking at a lump sum of money and then run it through a series of returns, it does not matter what order those returns happen in. You can shuffle the deck and those same returns over a period of years and as you see on the screen here, we’ve got two examples side by side of the the the same period
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of years, but it it if we are just holding the money, it’s it does not matter. The end number that we get is going to be the same. However, and here’s where the sequence of withdrawal risk comes in, Aaron. If we start making withdrawals from that fund at the same time that we are shuffling those different series of returns, that is sequence risk. Because if the bad years happen early on, then that is going to impact the entire trajectory of the rest of the returns and the remaining amount of money that
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gets to experience those returns. And so, since no one knows that the next three or five years are going to be good years in the market and we’re not going to experience those negative returns sooner in our sequence, we need to safeguard against that and we need to have a strategy to keep some dry powder or some money available that we don’t have to liquidate out of our investment account at the wrong time and we don’t have to lock in losses or remove those dollars and their ability
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to participate in the eventual recovery that should happen in the market and and and has historically always happened regardless and despite volatility. So, we want to leave investment money invested. That’s why investing is a long-term time horizon kind of proposition, but income is not. Income is I need this money now today. None of my bill collectors call me and say, “Hey, the market’s down. We’re going to, you know, forgive or delay your payments.” That’s not the way it works.
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we need to have some source that is dependable and reliable to generate income despite the volatility that we might experience with our investments. But, we do also want to have some money that is exposed to the market because that growth opportunity is also important over time. It’s just that time needs to be a longer-term time horizon. As we get right up on creating income, that’s when sequence of returns risk really uh is something to be aware of, to to know about, to educate yourself
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on, and to specifically address in your planning and strategies to avoid. Mhm. I hear you answering this question, but I would love if you could give me some specifics as to how we guard against sequence risk. So, I I I hear one strategy of keep 2 to 3 years worth of living expenses in cash. And and theoretically, that would do it, but but the market is up far more often than it is down. And and the thing that I I don’t really love about that approach is that for two or three years worth of
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your income, you’re missing out on the growth opportunity that that you could be experiencing. So, I don’t want that amount of money. Like, that’s a lot generally for for people. Two or three years worth of living expenses is a very large amount of of of money, a good portion of their assets. And to have that just gathering dust in cash probably is not a real reasonable solution. But, there are plenty of options on the more conservative end of the spectrum, some with no market risk whatsoever that can generate a more
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reasonable rate of return and hopefully keep up with at least bare minimum inflation so that we’re not losing purchasing power. Um anything from bonds to structured notes to CDs to annuities to uh there are any number of things that are on that more conservative end of the spectrum. Buffered buffered or principal protected ETFs, like there there’s a lot that could go there that the financial world has sort of overlooked or ignored or not educated us on because the uh the FOMO factor, the greed factor, and the
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Wall Street incentive has put people uh in in higher risk and and grow grow grow cuz they’re going to be focused on rate of return. You know, sometimes the reliability of return is more important than the rate of return, and that really becomes apparent when you start creating income from your portfolio. Mhm. This was, you know, helpful, Peter, and one of the more exciting history conversations I’ve had. I am not a history buff myself, but if somebody would like to talk to you about, again,
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creating reliable retirement income, guarding against sequence risk, what’s the best way to reach you? Yeah, give me a call at Roshan Planning, 919-300-5886, 919-300-5886. Uh our company website is roshanplanning.com, and you can always get in touch with that us that way. Uh there there are two new tools that we’ve launched though, Aaron, that I think do speak to this issue and and will help people to address it. Number one is your 401k is not a tool for creating income. Your 401k is a tool for contributions and for
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growth and for market exposure, which also is risk and volatility exposure. So, if you’re looking to maybe um take money out of that 401k and better position it for your risk comfort or or future needs for income, 401kdistributions.com is a great tool that we’ve put online where you can get a guide for how and when and where taking money out of a 401k makes sense for you. And then topannuityincome.com, if you are specifically looking to generate income from a a a specific amount of dollars
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and you want to make sure you’re getting the best bang for your buck, topannuityincome is another online tool that we’ve created that’ll show you like the top payouts and and rates that are available from the different types of annuities and different companies and carriers or that are out there. So, our website reshanplanning.com, 401kdistributions.com, topannuityincome.com, all all tools I think that would help people in in addressing this issue and the and the the worry and risk of market
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volatility, which again, have a plan in place and expect volatility, don’t fear it. Right. [music] Peter, thank you very much for your time today. Thanks, Erin. Hey folks, Peter Reshan here with Reshan Planning. So glad that you are enjoying the podcast [music] Planning Matters Radio. You know, one of the tools that we’ve put out there that people really seem to appreciate >> [music] >> and really are are finding of value is at 919retired.com. It is [music] your retirement tax bill
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calculator. If you’ve got any kind [music] of retirement account, your tax-deferred 401k or IRA, this is the website, this is the resource where you can go, you can plug in your own numbers, your information, you can slide the the the tool calculator up and down for your tax rate or your amount of savings, and see what your tax bill is likely to be if you default and defer to the IRS’s plan versus what you could potentially bring that tax bill down to. A lot of times it is a very significant
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savings. So, if you have not yet, go to the website 919retire.com, run your numbers on the retirement tax bill calculator. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. [music] You are encouraged to seek investment, tax, or legal advice from an independent professional advisor. Any investments and/or investment strategies mentioned involve risk, including the possible loss of
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principal. Advisory services offered through Brookstone Capital Management, a registered investment advisor. The fiduciary duty extends only to investment advisory advice and does not extend to other activities such as insurance or broker-dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.
