Rubino & Liang Wealth Partners

How Retirement Strategies Should Change As You Age

Everyone should have a strategy for meeting their goals in retirement, but retirement can last for decades; you should adjust your strategy periodically depending on where you are. We are taught that we need to grow our investments to the biggest number possible, but when is that number sufficient enough to provide for your unique retirement goals?

Let’s look at how retirement strategies might change throughout life phases.

Retirement Strategy
First – Define your “retirement goal.”

Make sure you have the right goal. You maybe closer to retirement – but is your “plan” geared toward retirement?

Most people start off their retirement plan when they are in their 30s. Usually at this stage, accumulation is the focus, and the age of retirement isn’t even a concern. You most likely have different financial goals, like buying a house and having children. You are saving for today’s events but also saving for retirement in a 401k plan. Your choices in the 401k have one common goal: grow and make money!

Now as you get older, your financial goal may shift, but what if your strategy hasn’t? Will you need cash flow to fund retirement expenses, or growth so you can leave money to family or a charity? Maybe both? Without a detailed understanding of your goals and a focus on achieving them, you may find you’re unable to maintain the lifestyle you desire or, at worst, possibly running out of money in retirement.

Defining your goals should be the first step in analyzing your retirement strategy. Most strategies center on cash flow, growth or some combination of the two. After you define what you want your portfolio to do for you and how that might change over time, it’s important to define the length of time over which you can make investments before needing access, which often relates to your life expectancy or those of your beneficiaries.

Keep in mind we are living longer today. Life expectancy was in the 60’s when social security was born, today life expectancy is in the 80’s.

Your 60s: The Retirement Red Zone

In your 60s, you hit the most crucial decade, also known as the Retirement Red Zone. Your retirement date is probably occurring in this phase of your life; retirement goals have been made and are hopefully obtainable with your current savings. Now is the time to keep your eye on the ball. If your goals are attainable, the amount of risk you should be taking must be lowered considerably. In other words, it’s time to take some chips off the table! In Warren Buffet’s February 2018 letter to his investors, he said, “It is insane to risk what you have … to obtain what you don’t need.” If you’ve reached the point where your savings will allow you to sustain a comfortable retirement, Buffet’s words couldn’t be more fitting.

As you near retirement, it is imperative that you pay attention to the risk in your portfolio or assets. When you are 10 or more years away from retirement, you can afford to take on more risk because you have the time to make up any losses. Think back to 2008 – most people suffered substantial losses. If you weathered that storm and remained invested, 10 years later, you should have made up those losses and then some. But, what happens if you suffer a similar loss a year or two before retirement?

When in the Retirement Red Zone, you have a very small window to make up for your losses, and it could be difficult or nearly impossible to recoup those assets. Suddenly, your goal of retiring is pushed back a few years, or the income that you were hoping to generate from your assets is reduced, diminishing your quality life during retirement.

What Does “Reducing Risk” REALLY Mean?

When you are 10 or fewer years away from retirement (especially if you’re in the one-to- five-year range), it is crucial that you take a look at how you are invested. You should consider reducing the amount of risk you are taking on, especially if the amount you have saved is enough to meet your goals. Reducing risk doesn’t always mean rebalancing your stock-to-bond ratio.

Some important questions to ask yourself are:

  1. Do I have enough liquidity or emergency money in the bank?
    • You need to have an emergency fund, should you have any unexpected expenses in retirement.
  2. Should I reposition to products with guaranteed income streams to help supplement my Social Security or pensions?
    • There are products available that can provide you with what a lot of people no longer have: guaranteed income outside of Social Security.

Just like a great football team, every position matters. You can’t have a great quarterback and only rely on offense. To win games, you need to round out your team with good defense, special teams, a punter… you get the idea.

Success in retirement means being able to enjoy what’s important to you and not worry. Imagine being able to enjoy 20-30 years of retirement with added security of knowing you’ll have enough income each month, keep pace with inflation, and leave behind something for your children and grandchildren. Every good retirement plan should consist of these:

  • Know your monthly spend rate and determine what income sources you’ll have towards that. If it’s not enough implement an income plan so you’ll know the bills are paid regardless of the economy. Consider creating your own pension with a income annuity from a highly rated insurance company. Work with a qualified agent that understands retirement planning.
  • Have money set aside to keep up with inflation. Simply put you want your money to grow. Consider working with a financial advisor and put together a well diversified portfolio.
  • Work with a good estate lawyer or elder planning attorney. Make sure you have wills, powers of attorney, and health care proxies situated. Many times, having some of your assets and real estate in a trust to avoid probate and minimize tax makes a lot of sense. 

These are issues you need to consider, and this is a dialogue your financial advisor should have already started with you. More than ever, it is crucial that you sit down with your advisor as you get closer to retirement and continue to do so even into retirement. If they haven’t told you to consider reducing the risk of your assets, you should be asking yourself, “Why haven’t they?” Does this mean you haven’t achieved your goals yet? Or, are they just not paying attention to your goals like they should be?

If you are not confident that you are in the retirement strategy that is best for you, feel free to book a time that works best for you to speak with us about your retirement concerns.


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Let’s chat. Find a time on our calendar to reserve a 15 min. phone call with either Sam, John, or Ryan - we'll use this time to get to know you and your needs and talk about the retirement planning obstacles you may be facing.

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