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Surviving Retirement: It’s About Diversification

May 16, 2017

As students in our profession, financial counselors are typically exposed to the necessary steps that lead to a successful and fulfilling retirement. We learn and pass on our knowledge about the importance of a spending plan, managing credit and debt, insurance, estate planning, the list goes on. However, while we account for the financial implications, too often we are not exposed to what it means to live in retirement. For me, living means continuing to maintain my certification and to work in this field.

Why it important for me to still be employed and maintain my professional accreditation while in retirement?

Most of you reading this blog remember the 2007-2009 Great Recession that severely impacted the U.S. and the world economy. I was one of those giddy savers who, up to that point, had generally experienced favorable markets in which to plan and save for retirement. The Great Recession, like a bolt of lightning, changed that for many of us, with people seeing changes to their savings that amounted to 40% losses or more. It was a hard lesson on the importance of diversification, especially for those with heavily laden stock portfolios.

Now, as a retiree, I am particularly sensitive to the impact that a recession can have on one’s portfolio. Although I continue to work as a financial counselor, I primarily work on a pro bono basis, so without a regular employment income, it’s important that I maintain a portfolio that will sustain my needs throughout retirement. With that in mind, I have tried to structure my portfolio to withstand the onslaught of another hurtful recession, but there are no guarantees.

Enter Plan B

As a retiree, it’s important to have a Plan B. For me, this means having the ability to transition smoothly from retirement to workforce.  I maintain close ties to my personal finance profession and keep my certification current, allowing me to quickly enter back into my professional field. While I cannot expect my former employer to hire me back, I’m confident that I can use my experience to find a position or open a private practice if necessary. I am made more confident knowing that if or when I need to go back to work there will be clients out there who need my personal finance services, because they will have experienced the same economic downfall that I have experienced.

While financial calculators can estimate the likelihood for surviving retirement comfortably, they are not a perfect science. By maintaining my professional AFC® designation, I stay connected to the personal finance field and enhance flexibility and opportunity during my retirement. Specifically, it provides a valuable plan for sustainable income should I need it to get through a rough patch, and allows me to continue to learn and grow in an area that has always been of special interest to me.

Guest Contributer: Wayne Hanson, AFC®


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