ILMA Compoundings January 2017 - 32

BUSINESS HUB

Be Prepared to Retire
in a Volatile Market
By Murray Carter

I

n an ideal world, your retirement
would be timed perfectly. You would
be ready to leave the workforce, your
debt would be paid off and your nest
egg would be large enough to provide a
comfortable retirement - with some left
over to leave a legacy for your heirs.
Unfortunately, this is not a perfect
world, and events can take you by
surprise. In a survey conducted by the
Employee Benefit Research Institute,
only 44 percent of current retirees said
they retired when they had planned; 46
percent retired earlier, many for reasons
beyond their control. But even if you retire on schedule and have other pieces of
the retirement puzzle in place, you cannot
predict the stock market. What if you
retire during a market downturn?

SEQUENCING RISK
The risk of experiencing poor investment
performance at the wrong time is called
sequencing risk or sequence of returns
risk. All investments are subject to market
fluctuation, risk and loss of principal - and
you can expect the market to rise and fall
throughout your retirement. However, market losses on the front end of your retirement
could have an outsized effect on the income
you might receive from your portfolio.
If the market drops sharply before your
planned retirement date, you might have
to decide between retiring with a smaller
portfolio or working longer to rebuild
your assets. If a big drop comes early in
retirement, you may have to sell investments during the downswing, depleting

32

JANUARY 2017

| COMPOUNDINGS | ILMA.ORG

assets more quickly than if you had waited
and reducing your portfolio's potential to
benefit when the market turns upward.

DIVIDING YOUR PORTFOLIO
One strategy that may help address
sequencing risk is to allocate your portfolio
into three different buckets that reflect the
needs, risk level and growth potential of
three retirement phases:

Short-term (first 2 to 3 years): Assets
such as cash and cash alternatives that
you could draw on regardless of market
conditions.
Mid-term (3 to 10 years in the
future): Mostly fixed-income securities
that may have moderate growth potential, with low or moderate volatility.
You might also have some equities in
this bucket.


http://www.ILMA.ORG

ILMA Compoundings January 2017

Table of Contents for the Digital Edition of ILMA Compoundings January 2017

Letter from the CEO
Inside ILMA
What's Coming Up
Industry Rundown: International Insight
Industry Rundown: Market Report
Industry Rundown: Perspective
Industry Rundown: In the Know
Beth Ann Jones & ILMA: A Family Matter
Squeaky Wheels
Infineum Perspective
Business Hub
Counsel Compound
Washington Landscape
State of the States
In Network: Member Connections
In Network: Cross Connections
Portrait
ILMA Compoundings January 2017 - Cover1
ILMA Compoundings January 2017 - Cover2
ILMA Compoundings January 2017 - 1
ILMA Compoundings January 2017 - 2
ILMA Compoundings January 2017 - Letter from the CEO
ILMA Compoundings January 2017 - Inside ILMA
ILMA Compoundings January 2017 - 5
ILMA Compoundings January 2017 - What's Coming Up
ILMA Compoundings January 2017 - 7
ILMA Compoundings January 2017 - Industry Rundown: International Insight
ILMA Compoundings January 2017 - 9
ILMA Compoundings January 2017 - 10
ILMA Compoundings January 2017 - 11
ILMA Compoundings January 2017 - Industry Rundown: Market Report
ILMA Compoundings January 2017 - 13
ILMA Compoundings January 2017 - Industry Rundown: Perspective
ILMA Compoundings January 2017 - Industry Rundown: In the Know
ILMA Compoundings January 2017 - Beth Ann Jones & ILMA: A Family Matter
ILMA Compoundings January 2017 - 17
ILMA Compoundings January 2017 - 18
ILMA Compoundings January 2017 - 19
ILMA Compoundings January 2017 - 20
ILMA Compoundings January 2017 - 21
ILMA Compoundings January 2017 - 22
ILMA Compoundings January 2017 - 23
ILMA Compoundings January 2017 - Squeaky Wheels
ILMA Compoundings January 2017 - 25
ILMA Compoundings January 2017 - 26
ILMA Compoundings January 2017 - 27
ILMA Compoundings January 2017 - Infineum Perspective
ILMA Compoundings January 2017 - 29
ILMA Compoundings January 2017 - 30
ILMA Compoundings January 2017 - 31
ILMA Compoundings January 2017 - Business Hub
ILMA Compoundings January 2017 - 33
ILMA Compoundings January 2017 - 34
ILMA Compoundings January 2017 - 35
ILMA Compoundings January 2017 - Counsel Compound
ILMA Compoundings January 2017 - 37
ILMA Compoundings January 2017 - 38
ILMA Compoundings January 2017 - Washington Landscape
ILMA Compoundings January 2017 - State of the States
ILMA Compoundings January 2017 - 41
ILMA Compoundings January 2017 - In Network: Member Connections
ILMA Compoundings January 2017 - 43
ILMA Compoundings January 2017 - In Network: Cross Connections
ILMA Compoundings January 2017 - 45
ILMA Compoundings January 2017 - 46
ILMA Compoundings January 2017 - 47
ILMA Compoundings January 2017 - Portrait
ILMA Compoundings January 2017 - Cover3
ILMA Compoundings January 2017 - Cover4
https://www.nxtbook.com/ygsreprints/ILMA/G127535ILMA_vol71_no7
https://www.nxtbook.com/ygsreprints/ILMA/G126213ILMA_vol71_no6
https://www.nxtbook.com/ygsreprints/ILMA/G125546_ILMA_vol71_no5
https://www.nxtbook.com/ygsreprints/ILMA/G124996_ILMA_vol71_no4
https://www.nxtbook.com/ygsreprints/ILMA/G123886_ILMA_vol71_no3
https://www.nxtbook.com/ygsreprints/ILMA/G123315_ILMA_vol71_no2
https://www.nxtbook.com/ygsreprints/ILMA/G122980_ILMA_vol71_no1
https://www.nxtbook.com/ygsreprints/ILMA/G121540_ILMA_vol70_no11
https://www.nxtbook.com/ygsreprints/ILMA/G120882_ILMA_vol70_no10
https://www.nxtbook.com/ygsreprints/ILMA/G120035_ILMA_vol70_no9
https://www.nxtbook.com/ygsreprints/ILMA/G121XXX_ILMA_vol70_no8
https://www.nxtbook.com/ygsreprints/ILMA/G120XXX_ILMA_vol70_no7
https://www.nxtbook.com/ygsreprints/ILMA/G119XXX_ILMA_vol70_no6
https://www.nxtbook.com/ygsreprints/ILMA/G118112_ILMA_vol70_no5
https://www.nxtbook.com/ygsreprints/ILMA/G117382_ILMA_vol70_no4
https://www.nxtbook.com/ygsreprints/ILMA/G116888_ILMA_vol70_no3
https://www.nxtbook.com/ygsreprints/ILMA/G115555_ILMA_vol70_no2
https://www.nxtbook.com/ygsreprints/ILMA/G114774_ILMA_vol70_no1
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no12
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no11
https://www.nxtbook.com/ygsreprints/ILMA/g110500_ILMA_vol69_no10
https://www.nxtbook.com/ygsreprints/ILMA/g109884_ILMA_vol69_no9
https://www.nxtbook.com/ygsreprints/ILMA/g109284_ILMA_vol69_no8
https://www.nxtbook.com/ygsreprints/ILMA/g108494_ILMA_vol69_no7
https://www.nxtbook.com/ygsreprints/ILMA/g107507_ILMA_vol69_no6
https://www.nxtbook.com/ygsreprints/ILMA/g106483_ILMA_vol69_no5
https://www.nxtbook.com/ygsreprints/ILMA/g105803_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/g104743_ILMA_vol69_no3
https://www.nxtbook.com/ygsreprints/ILMA/g103647_ILMA_vol69_no2
https://www.nxtbook.com/ygsreprints/ILMA/g102869_ILMA_vol69_no1
https://www.nxtbook.com/ygsreprints/ILMA/g101930_ILMA_vol68_no12
https://www.nxtbook.com/ygsreprints/ILMA/g100836_ILMA_vol68_no11
https://www.nxtbook.com/ygsreprints/ILMA/g99200_ILMA_vol68_no10
https://www.nxtbook.com/ygsreprints/ILMA/g98468_ILMA_vol68_no9
https://www.nxtbook.com/ygsreprints/ILMA/g97711_ILMA_vol68_no8
https://www.nxtbook.com/ygsreprints/ILMA/G96767ILMA_vol68_no7
https://www.nxtbook.com/ygsreprints/ILMA/G95397ILMA_vol65_no6
https://www.nxtbook.com/ygsreprints/ILMA/G94323ILMA_vol68_no5
https://www.nxtbook.com/ygsreprints/ILMA/G93127_ILMA_vol69_no4
https://www.nxtbook.com/ygsreprints/ILMA/G91785_ILMA_vol68_no3
https://www.nxtbook.com/ygsreprints/ILMA/G90956_ILMA_vol68_no2
https://www.nxtbook.com/ygsreprints/ILMA/G89146_ILMA_vol68_no1
https://www.nxtbook.com/ygsreprints/ILMA/G87981_ILMA_vol67_no12
https://www.nxtbook.com/ygsreprints/ILMA/G85409_ILMA_vol67_no11
https://www.nxtbook.com/ygsreprints/ILMA/G83595_ILMA_vol67_no10
https://www.nxtbook.com/ygsreprints/ILMA/G81672_ILMA_vol67_no9
https://www.nxtbook.com/ygsreprints/ILMA/G80238_ILMA_vol7_no8
https://www.nxtbook.com/ygsreprints/ILMA/G79388_ILMA_vol7_no7
https://www.nxtbook.com/ygsreprints/ILMA/G78361_ILMA_vol7_no6
https://www.nxtbook.com/ygsreprints/ILMA/G77448_ILMA_vol7_no5
https://www.nxtbook.com/ygsreprints/ILMA/G75899_ILMA_vol67_no4
https://www.nxtbook.com/ygsreprints/ILMA/G75036_ILMA_vol67_no3
https://www.nxtbook.com/ygsreprints/ILMA/G72720_ILMA_vol67_no2
https://www.nxtbook.com/ygsreprints/ILMA/G72220_ILMA_vol67_no1
https://www.nxtbook.com/ygsreprints/ILMA/G70970_ILMA_vol66_no12
https://www.nxtbook.com/ygsreprints/ILMA/G69813_ILMA_vol66_no11
https://www.nxtbook.com/ygsreprints/ILMA/G67522_ILMA_vol66_no10
https://www.nxtbook.com/ygsreprints/ILMA/G66343_ILMA_vol66_no9
https://www.nxtbook.com/ygsreprints/ILMA/G64859_ILMA_vol66_no8
https://www.nxtbookmedia.com