Advisors Discuss the ‘4% Rule’ and Top Retirement Tips

For those ready to make the retirement plunge, it’s essential they see their financial plan as a “living, breathing” one. That way it can accommodate market changes or other life fluctuations. They should also make sure to spread their nest egg across a diversified portfolio of accounts with varied tax liabilities, advisors shared.

Aaron Clarke, a wealth advisor at Gainesville, Virginia-based Heritage Financial, recommended that individuals heading into retirement review two key things. The first is the location of their assets. The second is how they can adjust their withdrawal plans to accommodate for the markets.

“You don’t know when the market might be down or up. If you are plus or minus three to five years of your retirement date, there’s a very big risk in that particular set of years,” Clarke said. “If you retire, and the market goes down by 20%, you taking out the standard amount in any given year will represent a bigger percentage of your portfolio.”

In other words, he looks at this as strategizing “how are you planning to avoid shooting yourself in the foot,” based on significant dips in the markets.