How not to run out of money in retirement with leading financial advisor Mark Cortazzo.
WEALTHTRACK Episode #1440; Originally Broadcast on March 23, 2018
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- Founder, Senior Partner,
- Macro Consulting Group
One of the scariest scenarios for retirees is the possibility of running out of money. According to this week’s guest, award-winning financial advisor Mark Cortazzo, when you retire and how you manage it can mean the difference between a comfortable retirement and a disastrous one.
Cortazzo cites three hypothetical examples to illustrate his point. He calls them the Three Brothers. They each retire with a million dollars, they each withdraw $60,000 a year, $5,000 a month, but they retire three years apart.
Brother 1 retires in 1997, as the tech bubble was gaining steam. Brother 2 retires in 2000 at the top of the market, just before the tech bubble bursts. And brother 3 retires in 2003 as the credit bubble that imploded in 2009 was just getting started. They all invested in the S&P 500 and took the same amount of money out every year but they had very different outcomes.
By the end of 2017 brother 1 had over $2 million in his portfolio. Here’s the scary part, brother 2 had run out of money entirely in 2016 after only 16 years in retirement. And brother #3 had more than $2 million left after 14 years.
There are real-life lessons to be learned from these outcomes which we will discuss. Our top priority will be avoiding the fate of brother 2 and running out of money during retirement!
Mark Cortazzo has been a WEALTHTRACK regular over the years. He is a certified financial planner as well as the founder and senior partner of Macro Consulting Group, an independent wealth management firm established in 1992. He has been named to Barron’s Top Advisors list for many years.
As always, this week’s program is available to ourPREMIUM subscribers right now. And in our exclusiveEXTRA feature Cortazzo will explain the sizable impact competitive pole vaulting has had on his personal and professional life.
BUILD UP YOUR SAVINGS
- Americans carrying record amounts of debt
- The lowest savings rate in 12 years
- Little room for error
- Retirees need a cushion to see them through bear markets
- Withdrawing principal during market declines can seriously hurt financial security
No Bookshelf titles this week.
CORTAZZO: RISING RATES INVESTMENT
: iShares Floating Rate Bond ETF
- Investment grade corporate bond portfolio
- Rates adjust with interest rate fluctuations
- Principal protection as rates rise
No stock mentions in this episode.[/tab]
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Award-winning financial advisor Mark Cortazzo started winning accolades as a youth in a completely different arena, but he says pole vaulting has affected both his professional and personal life.