Retirement Readiness, Active Vs Passive Investing & Sequence Of Returns Risk

Chad starts by discussing the upcoming event, "7 Steps for Retirement Readiness," which covers crucial aspects such as taxes, income, long-term care, safe money, investing, life goals, and health and wellness. He emphasizes the importance of this event in light of the challenges faced by investors in the current economic climate.

Moving on, Chad delves into the world of investing, specifically focusing on the S&P 500, NASDAQ, and popular tech funds like XLK. He highlights the concentration of the S&P 500 in technology stocks and the need for diversification, especially as one approaches retirement and transitions from growth-focused investments to a more balanced portfolio.

The discussion then shifts to the 4% rule, a guideline for determining retirement income. Chad explains that while the 4% rule is a useful starting point, it should not be blindly followed. He emphasizes the importance of having a comprehensive financial plan that considers factors like taxes, healthcare costs, and unexpected expenses.

The episode also explores the active vs passive investing debate. Chad suggests that a combination of both approaches can be beneficial, with passive investing being more tax-efficient in taxable accounts and active management potentially outperforming in certain asset classes like small cap and international stocks.

Lastly, Chad addresses the concept of sequence of returns risk, which refers to the impact of market fluctuations on retirement income. He emphasizes the need for a withdrawal strategy, diversification, and proper planning to mitigate the potential negative effects of market downturns.

Overall, this episode of "New Focus on Wealth" provides valuable insights and practical advice for individuals seeking to enhance their retirement readiness, navigate the active vs passive investing landscape, and understand the risks associated with sequence of returns. Don't miss out on this informative and engaging discussion with Chad Burton, a seasoned financial planner.

Timestamps:

[00:01:35] Retirement challenges and inflation.

[00:04:34] Concentration in investment portfolios.

[00:10:05] The 4% rule.

[00:14:55] Home maintenance and expenses.

[00:17:57] The Suitcases Always Packed Pass.

[00:22:34] Subscription management and savings.

[00:26:02] Active Management in Other Asset Classes.

[00:29:48] Trends in music industry.

[00:31:47] Sequence Return Risk.

[00:36:40] Long-term care and Medicaid planning.

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