Apt comparisons can be made between athletics and finance — even in terms of retirement strategies. Though retirees should have a trusted financial ‘coach’, the strategies and final decisions during game time is up to the quarterback — you. Brad Johnson, a former football player and current VP of Advisor Development, offered the three insights into how he turned his passion for football into a successful career as one of the foremost finance advisors.
Bend don’t break
Expect some losses but don’t accept them all. During volatile markets, investors oftentimes take flight. In long-term investing, this is the worst thing a retiree can do for themselves and the economy. If you can’t see past the burning forest, make sure you have a great team on your side to help advise you. If certain investments are “broken”, they should be able to steer you towards safer ground.
According to Brad Johnson, staying the course is the best way to ride out the volatility:
There was a saying we had as a defensive unit back in college when I was playing, “bend but don’t break” and I think it relates incredibly well to the mentality most retirees should take with their savings. You see in football it meant you can give up a first down or two on defense, just don’t give up the 60 yard [sic] bomb over your head or the big run down the sideline for a touchdown.
Don’t have all your players in one place
As mentioned in an earlier blog, much of the last 60 years of “tried and true” investing no longer reaps the rewards seen in decades before, however, one thing that does remain is diversification. Retirees should not be afraid of making certain risks but having a diversified portfolio, like diversifying your best players is a great tactic to employ. Using diversified retirement strategies like hybrid fixed annuities, IRAs, Roth IRAs, and the strategies mentioned here for retirement will spread out your best players.
This was drilled into us by our coaches and by making sure everyone was playing their position and role within the defense.
What’s interesting is that this exact same philosophy applies incredibly well to retirement and the need for utilizing tools within your retirement that all play a certain role. Just as you wouldn’t have an entire football team made up of 11 running backs, for most retirees they shouldn’t have an entire retirement nest egg made of high risk/high reward equities.
Have a good defense
As we’ve all heard many times: a good offense is a great defense. This also applies to retirement. The most prized asset in your financial portfolio is a Plan B. In other words, always prepare as much as possible. Your knowledgeable advisor is your best defense against making decisions based on misguided or incorrect intel. They should have the answers to your burning questions because they’ve played the game a lot more than you have! So don’t be afraid to confer with your coach.
With the help of your advisor, there are ways to implement safeguards that can help you grow and keep your money. In the words of Mr. Johnson, these advisors are a crucial way to keep all your “eggs” intact:
Going back to the “bend but don’t break” mindset, this is what sent many retirees looking for a part time job or caused them to delay retirement back in 08-09. Essentially their nest egg “broke” when the market was cut in half.
There are a number of tools available to help[s] create a sustainable base for income through retirement that help shield retirees from this risk – think of them like the offensive linemen on a football team, they don’t get much glory, but no football team could survive without them!
Like Brad Johnson, a financial advisor can help coach a retiree into strategizing the best retirement plan that will help them score a “touchdown” as Johnson puts it. At the end of the day, it is your retirement, your game so to speak; but with a keen knowledge of the playing field and a strong supporting team, a retiree can get to their end zone with a win.