Five Years from Retirement? Do This.

1 rich Libsyn https://www.libsyn.com 90 600 Five Years from Retirement? Do This. The five years before retirement are what David McKnight calls the Retirement Danger Zone, a window where a stock market crash could trigger Sequence of Returns Risk and even derail a well-designed plan. In this episode, he breaks down the retirement planning strategies that build an income floor, create a Volatility Shield, and protect your tax rate before it’s too late. Show Notes In this episode, David McKnight talks all things “Retirement Danger Zone”, the 5-year time window that precedes your retirement.&nbsp; When you’re 20 years from retirement and the stock market crashes, it stings but you still have time to recover. If you’re only a few years from retirement, on the other hand, a stock market crash may force you to take distributions from a portfolio that just lost 30 or even 40%. That move may send your portfolio into a death spiral from which it never recovers, also known as Sequence of Returns Risk. Even a well-designed retirement plan can be devastated by that risk. If you’re five years from retirement, the first step is to establish an income floor: figure out how much income you’ll need each year to cover your essential living expenses. Your essential living expenses may be completely covered but you’re still going to have discretionary expenses – which fall into two categories. Those can be so-called shock expenses (e.g. a new roof, an unexpected medical expense, etc.) or aspirational expenses (e.g. vacations, hobbies, etc.). Normally, you would pay for those expenses by taking money from your stock portfolio… but what if the market is down when one of those expenses arises? “This is why, by the time you retire, you should have 3-5 years of discretionary expenses accumulated in a properly structured, properly funded Indexed Universal Life Insurance Policy”, stresses David. David explains how a so-called Volatility Shield can help you when the stock market takes a tumble. The strategy shared by David can increase the sustainable withdrawal rate on your stock portfolio from 4% to as high as 8% with a 95% confidence rate. And there’s one more critical step to consider during your final five years before retirement: protecting yourself against higher taxes. Mentioned in this episode: David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter&nbsp; @davidcmcknight on Instagram David McKnight on YouTube &nbsp; The Power Of Zero Show http://davidmcknight.com/ <iframe title="Libsyn Player" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/43196328/height/90/theme/custom/thumbnail/yes/direction/forward/render-playlist/no/custom-color/87A93A/" height="90" width="600" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe> https://assets.libsyn.com/secure/item/43196328