How Are You Managing Downside Risk? Ep. 114 Artwork

Excel in Retirement

Where financial planning becomes understandable. David brings interesting stories each week to listeners of his Excel in Retirement show along with actionable ideas that may help listeners avoid pitfalls that many people face in their retirement. David C. Treece began his career in the financial services industry in 2011. He is an independent financial adviser. He has passed the Series 65 securities exam, and he is health and life insurance licensed in several states. David’s financial advisory firm focuses on retirement income planning.David worked for two other financial advisors before founding his firm in 2018. David launched Clients Excel because he has a desire for his clients to have a second to none experience when it comes to their financial planning for retirement. David relentlessly strives to be the best at helping people prepare for retirement.The bedrock of David’s ethos is treating others as he would want to be treated.David works tirelessly to continually bring pertinent content to our clients and friends through our weekly newsletter and podcast. Through these, David brings informative content that may aid you in preparing for retirement. Through his financial planning work, David’s hope is that his clients are empowered to have a confident financial future.David and his wife, Mallory, have a daughter named Amelia and rescue dog named Oscar. They also have a backyard flock of chickens that Amelia loves to tend. David and his family are active in their church in Spartanburg. He is also a volunteer mentor with JumpStart, which is a ministry for people who have been recently released from prison.

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Excel in Retirement

How Are You Managing Downside Risk? Ep. 114

March 08, 2023 • David C. Treece • Episode 114

Like a lot of people, I’ve always had a job where I work with people, and it’s always fascinated me to try to figure out why people think the way they do. People are unique, but their themes are similar.

In my role as a financial planner, I primarily assist Baby Boomers who are navigating how to retire. Or that’s often when we were first acquainted. In our initial meeting I always ask, “How are you feeling about the stock market?” You’d be surprised at the responses, but one theme repeats.

I ask this question when the stock market is doing well, and when it’s struggling like it has been recently. Naturally, the answers vary, but in our current prolonged downturn I’ve been getting an interesting response.

People have frequently said something along the lines of, “The market is down, but I believe in the market. It’ll come back, and we’ll (America) get it figured out.” I don’t disagree but think with me about the importance of our order of returns.

Steve and Bill are brothers. Bill has a few years on Steve. Bill retired in 2000, and Steve retired in 2010. They both entered retirement with $500,000 saved. They both began withdrawing $30,000 to supplement their incomes.

From 2010 to 2019 the worst market return came in 2018, but it wasn’t even a 6.5% decline. Most will recall that 2000 to 2009 was a wildly different situation. The market had four negative years with the worst of which being a drop of 38%.

Who do you think came out better? Clearly, Steve had more favorable circumstances. Steve, retiring in 2010 had over $874,000 in 2019 while taking the $30,000 away each year. Bill on the other hand was left with less than $97,000.

Managing risk in retirement is as important as managing our portfolio for returns. We call it going from an accumulation phase to an income and distribution phase.

When we’re younger and have a longer time horizon we should work to accumulate, but when we’re five years out from retirement or in retirement we should be in an income and distribution phase. The later goal being figuring out how to make our funds last as long as possible.

So, this begs the question. What is your strategy for managing your risk in retirement? If you don’t have one, we’d be happy to talk with you to share how we help our clients manage their downside exposure.

Do you have a question? Would you like to learn more? Email
Connect@ClientsExcel.com or call 864.641.7955.

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