In this episode, Roger explains how to rebalance your portfolio before retirement and why it's important to align your investments with the changing purpose of your money. He discusses how guaranteed income, your retirement plan's fundedness, and your comfort with market volatility influence your approach. Roger also shares a practical framework for organizing your assets into three layers to provide financial flexibility, fund your retirement paycheck, and support long-term growth. Plus, he answers listener questions about finding a retirement planner and preparing for the nonfinancial aspects of retirement.
OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN
- (00:00) Roger introduces the episode and discusses why rebalancing your portfolio before retirement is important, particularly as the purpose of your money changes. He previews the discussion on retirement portfolio allocation, listener questions, and a Rockin' Retirement in the Wild story.
RETIREMENT TOOLKIT: HOW TO REBALANCE YOUR PORTFOLIO BEFORE RETIREMENT
- (01:29) Roger explains why having enough liquidity is essential to enjoying retirement without allowing market downturns to force you to defer your life. He discusses three factors that influence how important rebalancing is: guaranteed income, how funded your retirement plan is, and your psychological comfort with volatility.
- (08:55) Roger walks through his practical approach to rebalancing, starting with creating a retirement plan of record and defining your base great life and discretionary spending. He explains how to assign every dollar a job through three layers: a contingency fund for unexpected expenses, an income reserve to fund your retirement paycheck, and a long-term portfolio for future growth. He also discusses how to determine appropriate reserves and execute the rebalancing strategy.
LISTENER QUESTIONS
- (20:25) William asks how to find a retirement planner who can validate his DIY retirement plan, prepare tax returns, and serve as a trusted financial resource for his wife if he passes away.
- (25:12) An anonymous listener asks whether conventional retirement planning focuses too much on accumulating wealth and not enough on preparing for the loss of purpose, mission, structure, and identity that can come with leaving work.
ROCKIN' RETIREMENT IN THE WILD
- (27:45) Rebecca shares how listening to the podcast helped her discover Social Security survivor benefits after her husband's passing and find her path to retirement. Now retired since 2024, she shares how she's living her best life.
SMART SPRINT
- (29:30) Evaluate whether your current asset allocation is doing the job it's supposed to do for the stage of life you're in or approaching. Consider whether strong market returns have made you hesitant to make adjustments that better serve your future needs.
ON THE BOOKSHELF
- (30:37) Kevin Lyle reviews Better with Age: The Psychology of Successful Aging by Alan Castel, exploring how attitude, adaptation, curiosity, and finding personal meaning can contribute to successful aging.
REFERENCES
What is Retirement Answer Man?
A top retirement podcast. Roger Whitney, CFP®, CIMA®, CPWA®, RMA, guides you on how to actually do retirement well financially and personally. This retirement podcast isn't afraid to talk about the softer side of retirement. It will teach you how to retire with confidence. Two-time PLUTUS winner for best retirement podcast / blog and the 2019 winner for best financial planner blog. This retirement podcast covers how to create a paycheck, medicare, healthcare, Social Security, tax management in retirement as well as retirement travel and other non-financial issues you'll need to address to rock retirement. Retirement isn’t an age OR a financial number. It’s finding that balance between living well today and feeling confident about your retirement. It’s about gaining more freedom to pursue the life you want. Join the rock retirement community at www.rogerwhitney.com