Investing Wisely in Your Retirement Years

(Slide 1: From 'Growth' to 'Income'

Let's talk about the biggest shift in your investment mindset. When you were working, it was okay to take on more risk, because you had time to recover from a market loss. You were focused on a high-growth strategy.

But in retirement, a big market downturn can be devastating, because you have a shorter time horizon to recover, and you’re actively withdrawing money. So, the new goal is to preserve your capital while also generating a steady stream of income. This isn’t about hitting a home run; it’s about consistently getting on base.

Slide 2: Two Main Categories of Retirement Accounts

As you may recall there are basically two main tax- advantage paths to saving for retirement: First, there are Individual Retirement Accounts, or IRAs. These are accounts that you can open yourself at a bank, brokerage firm, or other financial institution. Second, there are Employer-Sponsored Plans. These are plans offered through your job, like a 401(k) or a 403(b).

There are two main types of IRAs: Traditional IRAs and Roth IRAs. We're going to dive deeper into the specifics of each in latter lessons, but just know that they offer different ways to handle taxes, either now or in retirement. The important thing is that they both offer significant tax advantages compared to a regular savings account.

(Slide 3: Finding the Right Mix)

So how do you do that? It starts with asset allocation—which is just a fancy term for how you split your money among different types of investments.

As you probably know there are three main categories:

• Stocks offer growth potential, but they are more volatile.

• Bonds provide stability and regular interest income, and are usually a good buffer against market swings.

• Cash gives you quick access to money for immediate needs and helps reduce risk.

A good starting point to think about your mix is the "100 minus your age" rule. For example, if you’re 70, this rule suggests you might consider having about 30% of your portfolio in stocks. Remember, this is just a guideline, not a strict rule. The most important thing is to find a mix you're comfortable with—your risk tolerance. Are you someone who will lose sleep over a market drop, or can you weather the storm?

There is much more to investing strategies. We will provide more information about these strategies in another section of this course.

(Slide 4: Your Retirement Paycheck)

Your retirement paycheck won't come from a single job; it will be created from your investments. We'll show you how to create a reliable stream of income from several sources:

• Dividends from stocks: This is when companies pay a portion of their profits to you, the shareholder.

• Interest from bonds: When you buy a bond, you're loaning money to an entity that pays you back with regular interest.

• Systematic withdrawals: This is simply setting up a regular withdrawal schedule from your portfolio, like a monthly paycheck.

Other options, such as annuities, can provide a guaranteed lifetime income, but they can be complex. You'll need to check with your retirement savings provider for more information on this option. Ultimately, the goal is to mix and match these sources to create a dependable cash flow.

(Slide 5: The Rule)

I would like to leave you with an important lesson. A big mistake people make in retirement isn't an investment choice; it’s an emotional decision. Don’t try to time the market. The rule is simple: Stay the course. Don't panic.

Short-term market news can be loud and scary, but a well-thought-out plan is your best defense. Discipline is an important investment tool. Have a plan and stick to it—even when the market is volatile. Stay the course!

(Slide 6: Next steps)

For you next steps, you may want to examine your current portfolio and determine if is aligns with your current retirement goals.   When deciding on your stock to bonds percentage, use the allocation chart presented as a guideline.

Also, think about your risk tolerance on investing in the market (conservative, moderate or aggressive)

Also, I would like to remind you that when we mention stocks and bonds, we're referring to investing in mutual funds or ETFs, not individual stocks or bonds. We explain later how mutual funds or ETFs offers greater diversification and less volatility.

(Slide 7: Path to financial confidence)

As you can see in the slide ...

Planning isn't a chore—it's your tool for peace of mind.

Each one of these lessons is an important part of your retirement plan. By the time we’re done, you’ll have a more complete financial picture and a plan with resources to guide you through retirement finances with confidence.

As you can imagine, there is much more to investing strategies, and we'll provide more information about these strategies in another section of this course.

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