(Emma James and Tyler Haas dancing Argentine Tango in the Alvord Desert in Southeast Oregon | Photo courtesy of Emma James)
There’s no doubt that Bend is beloved for its stunning landscapes and allure of outdoor adventure, especially during autumn. However, my favorite thing about our city are the numerous surprises that lay beneath the surface of the usual outdoor activities, like Argentine Tango. Yes, you read that right – tango. I’ve been teaching lessons in our community for over eight years now and I can’t help but find the parallels between the work that I do as a financial planner and as a dancer. Tango, with its sultry moves and passionate embrace, can teach us a thing or two about the importance of confidence, especially when it comes to navigating the complex dance of retirement.
Reaching Tango Nirvana — Achieving Retirement Bliss!
Every tango dancer aspires to reach what we call “tango nirvana.” It’s experiencing a deep, juicy connection that makes all the years of practice worthwhile. Retirement is no different; it’s time to live the life you always imagined after a lifetime of hard work. But to make this next phase of your life remarkable, you must have confidence in your ability to enjoy it. Confidence in retirement isn’t simply having money in the bank; it means knowing exactly what that money can or can’t do for you for the rest of your life. That knowledge can enable you to pursue your passions without worry, whether that’s exploring Central Oregon’s natural wonders or taking up new hobbies. In the world of Argentine Tango, confidence is not just about fancy footwork; it’s about trust, connection, and knowing how to navigate the dance floor.
Taking the First Step
Imagine stepping onto the dance floor for the first time. Your heart races, your palms sweat, and you’re filled with doubt. Will you stumble, miss a beat, or lose your partner’s trust? Similarly, the journey into retirement may seem daunting at the beginning. Both share a common truth: the importance of taking that initial step with confidence.
In tango there are no choreographed moves. Instead, dancers rely on their training, their partner, and their ability to adapt to the ever-changing dance floor. Retirement, too, is a dance with the unknown. It requires financial confidence to adapt to the twists and turns life may throw at you. While you may not know for certain what’s in store, there are 8 key risks that most people face in retirement that you should be aware of.
Navigating the Dance Floor — The 8 Risks in Retirement
- Inflation: Although inflation has decreased to 3.7% (at the time of this article) from the high of 8.7% we saw last year; it doesn’t mean that it’s less of a risk. Inflation averages around 3% each year, which adds up if you’re planning on being retired for 20-30 years. It’s essential to ensure your purchasing power remains strong, especially when considering the increasing costs of living in Central Oregon.
- Interest Rate: When interest rates rise, the value of existing bonds or fixed investments tends to decrease, as newer bonds with higher yields become more attractive. This is particularly an issue in retirement planning when you consider that bonds historically offered safety to folks who are risk adverse.
- Sequence of Returns: Ever heard the phrase “timing is everything”? In retirement, that couldn’t be truer. The order in which you receive your investment returns can make or break your dreams. While there’s no predicting the markets, you do have control over the strategies you put in place to mitigate the impact of this risk.
- Market Volatility: Markets are unpredictable, and they can feel like dancing with a partner who changes the steps on the fly. However, with a well-diversified portfolio and a trusted financial advisor, you can maintain the confidence to dance through market turbulence.
- Allocation: Allocation risk refers to the danger of making incorrect decisions when it comes to how you distribute your investments among different asset classes, such as stocks, bonds, and cash. It’s a bit like creating a dance — if you put too much of one move and too little of another, you don’t end up with the results you’re looking for.
- Long-Term Care: 70% of American adults 65 years and older will require long-term care at some point. If not accounted for, long-term care needs can devastate the assets of a family or individual. Unfortunately, most people avoid talking about this topic until it’s too late.
- Taxes: Prove me wrong, but no one has ever said to me “I love paying taxes.” There are strategies that you can do now to minimize how much dough you’re putting in Uncle Sam’s pocket as well as in the future when you’re no longer around. If your primary residence is in Oregon, you have an extra layer of risk to navigate since estates over $1 million are subject to estate tax.
- Longevity: Congratulations! You’re expected to live longer. The good news: more time to explore Central Oregon’s beauty. The bad news: more years of financial responsibilities. Much like dancing the tango, the longer you stay in the game, the more confidence you need. A well-planned retirement accounts for the long haul, ensuring your resources can endure as you do.
Just as mastering the Tango takes practice, prudent retirement planning requires addressing each of these 8 risks. So, whether you’re dancing the night away or preparing for the best years of your life, remember that confidence is key. With the right partner, the right moves, and a little passion, you can glide through the uncertainties and find joy in every step of your retirement journey.
Rosell Wealth Management offers a complimentary R.I.S.K. AUDIT for people who have worked hard to save funds for retirement but don’t have a clear idea of what their money can do for them. If you’d like to learn more about the 8 risks in retirement and how to address them, please call us at 541-385-8831 to schedule a meeting with our team or visit our website at rosellwealthmanagement.com/begin-a-dialogue.
Emma James is a financial planner at Rosell Wealth Management in Bend. She also teaches Argentine Tango lessons with her partner, Tyler Haas, every Wednesday at the Sons of Norway Hall.
Investment advisory services offered through Valmark Advisers, Inc. an SEC Registered Investment Advisor Securities offered through Valmark Securities, Inc. Member FINRA, SIPC 130 Springside Drive, Ste. 300 Akron, Ohio 44333-2431. 800-765-5201. Rosell Wealth Management is a separate entity from Valmark Securities, Inc. and Valmark Advisers, Inc.