John, very good to see you an important topic today, how to protect your savings when or if markets plunge if you're within five years of retiring, either before or after, you are at your most vulnerable financially. So we have five tips to weather the volatility. First, build a cash cushion. This protects against sequence risk. Explain.

Yeah. So before we get into that, first, I want to talk to you about you mentioned five years before and five years after your retirement, these are indeed, your 10 most critical financial lives. Prudential did a study years ago calling this the retirement red zone. Yeah. And the reason for this is the term sequence first that you just used see when you're working and you have your 401, k or a company plan, if the market goes down, you're making contributions into that plan, and you're doing what's called dollar cost averaging, so you're actually lessening the blow of those market losses. However, once you retire and you start taking distributions and you can no longer make contributions. You're doing the exact opposite. So let's say you retire, and you have the unfortunate luck in the very early years of having a market downturn when you have to take distributions. And let's say the market goes down 20% you take out your 20 you take out your 4% now you just took a 20% loss, turned it into a 24% loss, which is called sequence of returned risk and early in retirement, it has a snowball effect that a small snowball can turn into an avalanche. So talking about your first solution, having cash reserves is a big thing. Every person, whether you're retired or not, should have at least six months of cash reserves sitting in your bank for an emergency. Now, if you're retired and you do not have a pension or any other predictable, sustainable income stream, and you're just living off distributions for the market, you should have 12 to 18 months of cash reserves. Yes, folks, 12 to 18 months, because that is going to help you weather a cycle. Because if the market's down, if you can avoid taking distributions from those down markets, those that down IRA and instead pull it from your bank account. You're not going to expose yourself to sequence of returns risk, and that is huge. The other thing I tell people is, if you have a big planned vacation or remodel in the next 12 months, set that money aside, give up the rate of return for the peace of mind and knowledge of knowing that you have the money to pay for that project.

All right, tip number two would be, consider changing the balance of equities and fixed investments in your portfolio. This is a delicate balance, though, because you still need your money enough money invested in equities to combat against inflation. Yes, you have to keep up with inflation. That's an obvious so I agree that you have to have equities in your portfolio. And I'm going to go on that there's, there's a couple of nuances on how you're investing that you should look at. This number one, if you're a traditional buy and hold type of investor, I've had that that investment strategy for my clients for many years, if you're a buy and hold, you must be diversified, right? That's not having two or three different stocks. You need to be diverse. They're diversified between equity, ETFs, more stocks and bonds and perhaps alternatives, or, you know, gold and silver, you have to have a diversified portfolio. The second thing, as you retire, you do not have the time horizon, especially if you're taking distributions, to be as aggressive as you were when you're working. So you need to tone down the risk. So maybe you are an aggressive person. Now you may have to tone it down to being more moderate, and that's going to go in line with your risk tolerance. How big of a loss is you can stomach? And more importantly, the term that we you have used in the past, risk capacity, how much risk can you afford to take? And you know from there you are going to look at your portfolio of how much you can lose, not the upside, but how much you can lose, to ensure that your portfolio sustains the distributions throughout your retirement. Now, Erin, I've kind of transitioned my investment strategy to a little bit more tactical. And so I'm going to give one more nuance of what you know we do with our clients, and it's really looking at market conditions. And we've had a lot of videos that talked about when the markets are at all time highs. What area are we looking at there? Erin, the area of point of the of most financial risk, that is your maximum financial risk, right? So why would we take a new client at the top of the market and buy at the top? That's not smart. So what we've been doing now is saying, Hey, listen, we're going to do go in a little bit more of a conservative approach, because we understand the market is most likely going to come down, so why buy at all time highs? Let's be smart about this. And then, as the market has peeled back, and we really saw this, from October through April, we started taking chips off the table. Again, that's a much, much more advanced approach, but for your do it yourself, or there's something to think

about, all right. Number three, you may also want to adjust your spending. Is this another way of saying, though, that we need to adjust our withdrawal rate?

Yeah, and you know, you have to think about your spending in two to two areas, your baseline retirement. You need this money to survive, yeah, and then your lifestyle expenses, and that's where, if your borderline of maybe not being able to afford your retirement, of saying, Listen, we may have to cut back on spa day or golf day once or twice a month, and make those decisions because you want to make sure you have longevity in our office, Erin, we use a very advanced income planning software. As you can see on the screen here, we're able to tell a client listen based on your investments and your your income sources, this is how much money you can take every month and and, and you have a high probability of making it to and through retirement. We're able to show them that. But you know the old Monte Carlo of hey, you have 90% chance of success. That does not resonate with our clients, nor does I do. I think it resonates with our viewers. We like to be able to tell our clients now, in a good time, if the market goes up, guess what? You can go on an extra trip, or you can have those extra spot days, because you can spend a little bit more. But the more important number is, what if the market drops? What if you're spending too much? Well, if your account balances get to this area, you're going to have to make proactive changes. Now, this may not be permanent, right, but you may have to make, you may have to have a reduction in spending for a year, maybe two years, you know, depending on on the conditions of the market, to make sure your money goes and makes it to and for your retirement and for our clients, this really adds to that peace of mind of understanding like, okay, these are the boundaries. This also sets risk capacity. Listen, you can't lose more than 25% or 30% so we have to ensure that we're always staying below that number, and it gives them the confidence going forward that we can quickly, proactively make decisions for them.

Yeah, yeah. It's a moving target. That's exactly what you're saying, what I hear you saying, right? I wish there were one rule of thumb, one number we could all use, but it's simply not that easy. Exactly, all right. Number four, as painful as it might be, you might need to work a little bit longer, which can, of course, help with income and also delaying when you claim Social Security.

Yeah, so if you're, you know, teetering on, you know, you're just barely making that income, and you have to take on a lot of risk to get that income. Or if you're, you know, looking to retire, and six months before retirement, the market takes a drop. Your 401, K's dropping. This is where I tell people, listen, you have three choices. Number one, you can continue to work. Number two, if you don't want to continue to work a full time job, then perhaps work a part time job that you love, right? We want to be enjoyable, but work a part time job to help take the pressure off that income. Because, number three, your only other option is to reduce spend, and really to start to look at the things that you enjoy doing in the life lifestyle expenses, and start reducing or eliminating them, and we don't want that for our clients. We want them to have fun. We want them to really enjoy those go, go years. But again, it goes back to the time to make that decision is before you're in the rut, and ideally, it's why you're still working right while you're building your retirement house. It's easy to make those changes to make sure you have the confidence going forward. So if that takes working one more year, and that gives us the ability to show our clients, listen, look at just by one year less spending and one year additional savings, the impact that has on your retirement that can go a long way in the plan.

And last, of course, speaking with a fiduciary advisor can help ensure that you retire when you want. And an advisor can design a plan tailored to your goals and designed to protect, protect against all these risks, right? Volatility, sequence risk, so many more.

Yeah, and I may sound biased, they are Erin telling everybody on this channel to get an advisor, because I'm an advisor, and that's how, you know, I feed my family. But you know, when Tom and I set out with the podcast, and when you and I set out with this YouTube channel, it's really trying to lead from a point of education, because, you know, there's a lot of people out there that watch our videos, listen to our podcasts, that aren't going to have the opportunity to be our clients, but I feel it's it's a responsibility of mine to get unbiased education out there to help those people make decisions. So I will tell you, retirement is not as easy as you think it is. And there's been a lot of studies, you know, and articles that have shown that, you know, people get a little too comfortable because their 401 ks went up while they're working, and they have to really think about finances. Well, you had a paycheck. Now, in retirement, you have a lot of different things. You know, you don't have a paycheck unless you have a pension. You have, you know, various tax for pedos that you don't have in your working years. So there's a lot of things that I have to know as a Retirement Advisor, I go on behind the scenes that are very complex. And you know, if you're tackling this alone versus using an advisor, you have to understand that when my clients come to me, they're getting access to advanced retirement planning software, advanced income planning software, advanced tax planning software, and a person who dedicates a lot of their time to staying up with the laws and latest financial planning techniques and trends to ensure their clients have the best chance at success in retirement. So there's a lot that goes into this. That's why it's a career. So if you're a do it yourselfer, you have to understand that you're taking a huge responsibility for you and your spouse into your hands, and you have to be on top of it. The other thing my clients love is they have someone not to make decisions for them, but to help guide them through the decisions. And then when they, you know, get a little bit antsy about, you know, life events or the markets, they have someone to turn to and talk through things, and ultimately, kind of have that financial therapist and guide for them, right? Yeah, no, it is a full time job, and Nobody works harder than you. I know you really well. We've been working together a long time, so you know, it's great to talk this through again, John, this is the world you live in. You are aware of these risks, and the good news is we can plan for them. So if somebody wants to sit down with you and talk about strategies to mitigate all these risks, what's the best way to reach you?

Yeah, well, as I mentioned, always leading from a point of financial education, visit our website, www.gosecurus.com, while you're there, you'll see all of our videos in the past, our podcasts, what we do for our clients and who we serve. And if you're interested, go to the contact us tab, and from there, you can schedule a 20 minute phone consultation where we'll answer any questions for you, or you can schedule a complimentary vision and clarity consultation. And if you have any questions, or you just want to send us an email, you can always email us at info at www.gosecurus.com Okay, John, thank you very much. Thank you, Erin.