Buy and Hold … or Buy and Hope? It's Time for a Better Retirement Planning Strategy

Once you're retired, your focus should shift from maximum growth to strategic preservation and purposeful planning to help safeguard your wealth. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. 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We're encouraged to invest in quality companies, stay the course, and over time, the market will deliver positive results.That may have worked fine for someone in their 40s or 50s with decades of earnings ahead.But if you're retired — or near retirement — "buy and hold" often turns into something else entirely: Buy and hope.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.Unfortunately, hope is not a reliable financial strategy.When you're no longer earning a paycheck, your investment losses become real, not just "paper losses." A 20% market decline isn't something you can simply wait out when you're drawing income from your portfolio.Every dollar withdrawn after a loss compounds the problem, and you're taking money out of an already shrinking pool.About Adviser IntelThe author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.We've seen one of the longest bull markets in history, fueled by low interest rates, stimulus and optimism. But economic cycles always turn. The next downturn isn't a matter of if — it's a matter of when.For retirees with significant assets, the next downturn could be devastating if their portfolio lacks appropriate risk management strategies. Remember, a 30% loss requires a 43% gain just to break even!Hope is not a strategy for a retiree.The rules change once you transition from accumulating wealth to taking income from it. Market volatility that once seemed tolerable can now have lasting consequences.This is primarily due to the danger that market losses early in retirement, combined with regular withdrawals, can permanently erode a portfolio's ability to recover.Even if the market eventually rebounds, the damage may already be done. Retirees who are drawing income during a downturn may be forced to sell assets at depressed prices, locking in losses and reducing future growth potential.After 16 years of unprecedented market performance and economic stimulus, many portfolios have benefited from tremendous growth since 2009.However, history shows that markets move in cycles and extended bull markets are inevitably followed by corrections.The lesson is clear: The time to prepare is before the next downturn, not after it begins.For retirees with substantial assets, the goal should shift from maximum growth to strategic preservation. A prudent wealth management plan should focus on:Preserving wealth requires active management, thoughtful allocation and a clear understanding of how each component of your portfolio supports your long-term goals.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.The financial landscape has evolved, and some retirees may find that traditional investment approaches no longer align with their income needs or risk tolerance. "Buy and hold" may sound reassuring, but for those who cannot easily replace lost capital, it is often a passive and risky approach.Instead, consider adopting a strategy built on preparation, preservation and purposeful planning — one that seeks to help safeguard your retirement assets in various market conditions.Because in retirement, financial confidence isn't about how much you can make. It's about how much you can keep.If you've already accumulated your wealth, your focus should shift from growth at all costs to preservation and stability. The old "buy and hold" mantra may still be fine for young investors, but for retirees, it's time to move beyond hope and start planning with purpose.The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.Insurance products are offered through the insurance business Stuart Estate Planning.

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