Coffee with Mike – Good or Bad? For the Retiree

You know, if you're an employee and the market goes down, the share price is down, you're ok with that, or at least you should be, because buying more shares when you're contributing. So, "awesome, share price is down? I get to buy more!" However, when you're a retiree and the share price goes down, that means your balance goes down and you're not buying anymore. You're not allowed to buy anymore because you're not in the system as an employee. And it feels like you've lost something that you can't regain and thats something that is really important to realize.

Losses, they seem different when you're not making contributions, and especially when you're not getting agency contributions. They feel different. When you're an employee and you continue to contribute, you're muting your losses. You don't know what a loss feels like yet because you put money on top of it.  and when you have a gain, since you've put money on top of that, you've kind of exaggerated what it feels like to have a gain, so you don't really know what a gain feels like. You don't know what a true gain or a true loss feels like until you retire. And that's what you have to deal with.

So now, when you have a market event like this in retirement, you get the idea "Oh, ok, this is what a real loss feels like, what a real gain feels like." You begin to think differently about risk tolerance, and take that opportunity then, to maybe split up your money, and to be able to take more risk with one part of it, but to be very safe with another part of it so that you know that no matter what happens in the market, you've got what you need for the immediate future. But also, despite what's happening in the market, you still money in a place that still has the potential to grow, get back what you've lost, but also grow beyond where it's been. And you need both in retirement. 

You know, you've worked for 30-35 years and you've piled up the money. And now you hope to be in retirement for 30-35 years, and you're going to decrease the money. So don't let market events keep you from enjoying your money. Instead, configure it so that  something always has the potential to grow, and something always has the potential to be safe. Therefore, you have the best of both worlds, no matter what happens in the market, and therefore you have the best feeling in the world as an investor and as a participant, as someone who is receiving income. Because you have that safety net, but you also have the opportunity to grow. That's what you're looking for. 

So again, it's just a different way of looking at things. It's a different way of thinking about these events that are going to happen in our lives. We can turn them into terrible events if we want to, I mean that's your choice, but actually we need to just flip it. We need to flip around what everyone else is thinking, what everyone else is saying. For all those people who want you to feel bad and panic, you've got to flip this around and realize, what's the good that we see here? One of the things that can be good is that you learn your limits as an investor in retirement, and you take appropriate steps to take potential for growth and potential for income no matter what happens. 

That's what we're talking about on our website, and we hope you'll give us an opportunity to help you there. Go to www.allaboutfers.com, go to our social media on Facebook and Instagram, and just see what we're saying there. What we're trying to do is help you flip it, to help you see things just a little bit differently so you can see what you need to see and take the appropriate actions so that you do what's best for you, and not what's best for someone else.