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Why Your Retirement Account Needs Guardrails

Why Your Retirement Account Needs Guardrails

April 21, 2020

Planning for and living through retirement can be like driving across the Golden Gate Bridge in San Francisco.  However, would you want to make that drive without guardrails?  What if a thick fog came through and covered the bridge that day?

Picture driving across that bridge with no guardrails on either side and fog coming down over you.  Suddenly, we may tend to cross that bridge with some trepidation. We might be paying very close attention to any unexpected potholes we may hit along the way that may throw us off that bridge.

As was mentioned in Part I of this blog post, “Why Income Protection Is Crucial During Times of Market Volatility” we cannot always see those potholes -- or in this case stock market volatility -- prior to the damage having already occurred to our retirement vehicle.  

No one can predict the future or the impacts future events will have on our retirement plans.

  • On September 10, 2001, we did not know the World Trade Center in New York City would be attacked the following day.  
  • In November, 2007, we couldn’t see the underlying financial crisis that lead to the Great Recession which would begin the following month. 
  • At just the end of last year, the thought of the COVID-19 virus spreading across the world was not on our minds. 

Each of these unforeseen “potholes” caused significant stock market volatility along the retirement road.

While traveling across that bridge to and through retirement, market volatility and corrections without guardrails on our investments can be detrimental.  

This can cause delay in our retirement from starting by years! 

It can possibly also cause so much damage to our retirement vehicle that we are not able to retire at all.  Worse yet, it may cause us to put our retirement car in reverse, come out of retirement, and head back to work.

Similar to having those guardrails across the Golden Gate Bridge, the right investment tool can offer both long-term growth potential plus a level of loss protection to your retirement assets. With such a tool, if the stock market hits a significant pothole (such as those mentioned above), the insurance company protects your retirement assets against that stock market loss.

Guardrails give people more comfort when driving across the Golden Gate Bridge -- those people become less concerned about the potholes that they may come across on their journey.

These stock market “guardrails” protect against the stock market causing your drive to retirement to be longer than planned for.  

Do you have any questions about how this applies to you, or do you have any friends or family members that you feel would benefit from adding guardrails to their retirement strategy?  If so, please give us a call at 303-996-9898.  We'd be happy to assist.

All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.