A trend I’ve seen rise over the past few years is the use of the words “creative” and “unique” regarding building retirement portfolios. The promise of a trailblazing retirement strategy seems to be becoming more and more popular.
There’s a big difference between a tailored and trailblazing retirement portfolio.
In my experience, being proactive, intentional, and goal-focused, which aligns with a retirement plan being tailored—is of greater importance than originality. Retirement portfolios don’t need to be groundbreaking to be successful, they need to move you closer to your goals and to weather upcoming storms.
For example, imagine your retirement portfolio is a home you’re building from the ground up. What’s more important to the long-term success of your home: a solid foundation or expensive paintings and a uniquely modern interior design?
For another example, consider you’re seeking treatment for a common illness. While your doctor will offer you a tailored solution based on your current state of health, allergies, age, and other factors, the medication they prescribe will be something that has worked for others in the past, and probably not an experimental pill.
Is Trailblazing Ever the Right Path?
There are two stages of retirement planning:
Accumulation
Distribution
During the accumulation (acquisition) stage, you’re beginning your journey by contributing to your retirement account and working to build a sizeable balance. Using some creativity and even blazing a new path will come with an increase in risk. Taking strategic risks during the accumulation stage is not discouraged. What type of risk and how much risk you take depends on your goals and the structure of your plan.
During the distribution stage of your retirement plan, blazing a new path could be harmful. By the time you get to the distribution stage, your focus should shift from taking risks to grow your balance to sustaining consistent, reliable streams of income that will support you throughout retirement.
Do you need help structuring your retirement plan as you near the distribution stage of retirement planning? Let’s talk! Contact me here.
Disclaimer: Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.