Why it’s important to regularly reevaluate investments when planning for retirement

An investment portfolio can be key to helping you retire early and with confidence. But how far can it stretch, and what’s important to help support it?

Even in cases where all indicators say your assets are steadily improving, it will never be smooth sailing forever, as the law of averages will likely kick in at some point. That’s why it’s important to reevaluate all options regularly.

Bright Wealth Management can provide consultation on which parts of your portfolio may need adjusting, and which parts it may be worth investing in further.

“We want to keep things in check, make sure that your risk is being managed appropriately,” said Mike Bauer, host of The Bright Wealth Management Show. “And the goal is not chasing performance. When you are retired, it’s not necessarily just about average returns, but it turns into a sequence of return that is so much more important.

“When are you making those earnings? … How are you avoiding those off-the-cliff moments? How can we lock in some of those great returns that you’ve made? And it’s really to keep your risk aligned with your retirement plan.”

How can people insulate their retirement plans for market instability?

President and founder of Bright Wealth Management Matt Dages said there are “a lot of broken aspects with that retirement system” when it comes to things like Social Security and its long-term viability.

And though many are working to change aspects of the system, it’s most likely that it won’t change more than once or twice each generation. Dages emphasized planning for the reality of the current situation and adjusting as necessary.

“Let’s look at today’s tax rates, and we’re going to build off of today’s tax rates,” Dages said. “I’m not going to project that they’re going to be higher. Let’s just say, how are they today and project if they’re the same forever.

“And we can make changes to what if this happens or what if the market crashes and what if taxes are changed? Then we can build a true-value foundation for a financial plan.”

The New York Mets and retired player Bobby Bonilla are a fun example of the stable retirement principle of ensuring there’s money waiting after closing the book on a job or career.

Because Bonilla was bought out of his contract at $6 million to be paid out over 25 years with a negotiated 8% interest rate, he has received $1.2 million each July 1 since 2011 and will continue to do so through 2035.

While it’s tough for everyday people who weren’t professional athletes to bank on the same type of situation, it’s a good representation of preparing assets in savings, retirement IRAs or 401(k)s to be converted into regular sources of income.

Anyone who wants to hear what the Bright Wealth Management team can do for them can claim a complimentary written financial plan online or by calling 480-866-0044.

The Bright Wealth Management Show with Matt Dages airs Saturdays from 1 p.m. to 2 p.m. and Sundays from 3 p.m. to 4 p.m. on KTAR News 92.3 FM. 

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