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"This Party is a Disaster!"

"This Party is a Disaster!"

February 28, 2022
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Have you ever tried bowling without lane bumpers?  There are those who do not need the extra support but for amateurs like me, they make the experience much more enjoyable.....

Several Years ago, my youngest Daughter (Penelope) wanted to have her 7th birthday party at a local bowling alley.  We invited all of her friends and made the necessary preparations....reserving the lanes, pre ordering the food, balloons, etc.  The day of the party, I needed to make a business trip to Columbus, OH but timed everything up so that I would be able to get back to Cincinnati to celebrate Penelope's birthday with family and friends.  Those of you who are parents understand that seeing your children experience joy warms your heart more than anything.

I remember how happy I was to finally arrive at the bowling alley after a long day of work and travel.  As soon as I entered the building, I could see my Wife (Carrie) speaking with the attendant and when Penelope saw me, she ran over to me and was in tears.  My heart sank as I asked her was going on.  "Daddy, none of my friends are having any fun and I don't know how to make them happy. None of them like bowling, so I'm pretty sure that means they don't like me! We haven't even made it through one game and everyone wants to leave already.  This party is a disaster." Obviously, I was very confused.  Who doesn't have fun at a birthday party???  So, I assured Penelope that everything would be ok and suggested that she return to her lane and her friends.

I walked over to Carrie to see what the issue was and she told me that they forgot to put up the lane bumpers and that they were going to take care of it right away.  Almost immediately, the mood changed for all of the young bowlers.  They were able to let loose without worry as the balls bounced back and forth before finally reaching the pins.  Now, it would be untruthful for me to say that all of the kids were getting strikes but what was important to the kids is that there were no more gutter balls!

By simply making this one change to add an extra layer of risk management, the party was saved and everyone was now having a wonderful time.  The celebration continued without anymore "glitches" and Carrie and I were happy that Penelope would have fond memories of the party.

The next day, I was thinking about the experience as I received a phone call from a client who was equally as upset as my daughter was the previous day.  This woman was only about 10 Years away from her planned retirement and she was getting nervous because of the daily volatility she was experiencing in her investment portfolios.  After working so hard for many years, she began to question her plans and strategy.  Some of the questions weighing heavily on her mind were....

  • Have I saved enough?
  • Will Social Security be enough?
  • How can I grow my "nest egg" without taking too much risk?
  • If my portfolio takes a downward turn, will I have time to "recover" so that I will be able to retire?
  • What happens when I need to begin taking income from my portfolio? 
    • Jamie, what is it you were telling me about sequence of returns risk?
  • Unlike my parents and grandparents, I don't have an employer sponsored pension so how am I going to get by?
  • How long will I live?
    • How long will my money last?
  • What can my Spouse and I expect to pay in healthcare related expenses?

When it comes to planning for retirement, understanding the extraordinary challenges many Americans will experience can be rather overwhelming.  Retirement should be a time to start a new life and experience the things you have always dreamed of.  While none of us have a crystal ball and cannot predict the future, the fact of the matter is that we are becoming increasingly more dependent upon our own savings to supplement our income in retirement.

Did you know that only 44 percent of workers have estimated how much income they will need in retirement? What’s more, only 36 percent have calculated how much money will be required to cover healthcare expenses.1

Creating a financial strategy means thinking about the bigger picture, including a variety of issues like monthly income needs, handling unexpected expenses and preparing for rising healthcare costs. People who take a “do-it-yourself” approach can quickly find themselves flustered by all of the variables they need to protect against.  You might find it to be helpful to consult an advisor who specializes in solutions designed to help mitigate risk in your financial life and ensure that you have plans in place to protect your income, asset and legacy needs.  Careful preparation can help put your mind at ease, knowing that you have financial "lane bumpers" in place.  Growing your assets is vitally important but understanding your risk management options, protecting what you have and preparing for the unknown are equally as important.

Would it surprise you to know that the number one financial concern of people planning for retirement is running out of income?2 I am not surprised.

If a current event or headline has caused you to reconsider your financial strategy or if you are unsure of your retirement readiness, please ask your advisor for guidance. Sometimes, a newsworthy event may signal that it is time to employ a new approach. Do you have a plan?

About James

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1. EBRI.org, April 23, 2020

2. American Institute of Certified Public Accountants AICPA

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.  James D. Orr does not offer tax planning or investment advice.  As a licensed insurance agent/agency offering fixed insurance and annuity products, James D. Orr and AnnuiLife Wealth Preservation are regulated by the Ohio Department of Insurance.  

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by James Orr to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any particular financial or insurance product.