Ray Lucia is not your average financial advisor. He is an accomplished money man whose intelligent input and charismatic nature has helped make him one of the nation's leading experts in the fiscal world of financial, tax, and retirement planning... not to mention he's a best-selling author, an engaging radio and TV personality, a highly sought after public speaker, and CERTIFIED FINANCIAL PLANNER™ practitioner. After teaching at a San Diego high school after college, Ray shifted his focus to pursue a career in financial services, as a better means to provide for his growing family. Early in their marriage, Ray and Jeanne, his wife of nearly 40 years, had four children in four years. Ray was also moonlighting in a rock and roll band, while transitioning from teacher to financial advisor. Throughout his career in the financial services industry, Ray Lucia, CFP® has made it his lifework to help thousands invest for retirement utilizing his widely recognized Bucket Strategy™ method for retirement. His dynamic public speaking skills enable him to cover an array of monetary topics including: asset allocation, social security, pensions, investments, annuities, insurance and taxes. Ray is largely recognized for his nationally syndicated radio show, "The Ray Lucia Show", aired daily from 12:00-3:00 pm Eastern Time in most of the country's top radio markets. Ray and his "Brain Trust" field questions from live callers who have real money issues. Furthermore, Ray is also a TV personality who is featured nationally on networks such as FOX News Channel, FOX Business, CNBC, NBC's The Today Show, and Bloomberg.
Examine Your Retirement Withdrawal Plan
Financial adviser Ray Lucia discusses the importance of understanding your retirement plan and figuring out what the necessary withdrawal percentage to maintain your current lifestyle into retirement.
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Ray Lucia: We each have a unique financial fingerprint, so there simply isn't any investment template that applies to a 100% of the people a 100% of the time. So baby boomers should think a little more critically, if they are planning their retirements spending based on the so called 4% rule.
You know the theory that retirees can plan on withdrawing 4% of your accumulated savings each year, adjusted for inflation for income to last throughout their life and retirement. So hypothetically a five hundred thousand dollar portfolio provides 20000 a year in retirement, then adjusts as cost inflate.
But what if your portfolio was overweighed and volatile stocks and you retired just as the market sunk, by 50% or more as it did some years ago. If you had planned to take a 4% withdrawal from that portfolio when stocks plunged, you would be trying to live on $10000 a year.
And what if you retire at a time when inflation spikes as some speculate it soon could, would a 4% distribution allow you to maintain your standard of living, or would you have to make concessions just as you lost your purchasing power.
So here is the bottom-line, planning on a 4% distribution may not give boomers the protection they need in volatile or inflationary times. The formula is too over-simplified and can't be predictable for all of your years in retirement. This is why it's essential to have a written financial plan that can be stress tested in anticipation of whatever variables could derail your primary retirement plan.
And keep in mind; it's critical to have a carefully calculated backup plan for your retirement too. Be proactive in establishing some protection for your portfolio.