Advisors who helped their clients establish a retirement investment strategy based on time horizons, have clients who feel more secure this October. The economic crisis of 2008 has many retirees very concerned over what adjustments to make in their retirement plans. The Dow Jones has gone from over 14,000 in October 2007 to under 10,000 at the start of October 2008. Advisors’ phones are ringing with retirees wanting to know, “What do I do?” or “Should we reduce our retirement income?” But, advisors who helped their clients invest using time horizons and retirement phases are telling their clients, “No need to make any changes. Your retirement strategy was built to allow riskier investments to have plenty of time to recover – your plans do not have to be adjusted up and down with market changes.”

Companies and advisors, who used Retirement Road Map from Impact’s PlanLab®, last year, can reassure their clients that their retirement plans are fine. Retirement Road Map recommends time horizon investments by retirement phases. The two images are pages from Retirement Road Map that explain investing by phases and time horizons (click to see full size).

Investing by Phases

Investment Time Horizons

Consider the case of Sam and Sara. They retired October 2007 when they were both age 65. They wanted to know how much should be invested, and how it should be invested to provide their desired retirement income.

Retirement Road Map Assumptions:

On the first anniversary of their retirement in October 2008, the country was in for a big shock. Sam and Sara found that there very conservative investments, from which they were withdrawing their retirement income was just about what was expected. But, the conservative investments had lost 10% of their value, their moderate investments had lost 20% of their values, and the aggressive investments had lost 30% of their values.

You can tell Sam and Sara that they should continue to make their regularly scheduled withdrawals. A plan that invests by phases and time horizons is design to allow market recovery over an entire phase. Even after what were larger first years loses than ever anticipated, they don’t have to make any immediate changes. With a few simple calculations, you determine that if the very conservative investments continue to earn 2%, and each of the other classes of investments average earning an extra 1 ¼ %, then their plan will continue to support their planned income through age 100. Their retirement plan allows for slow recovery, so there is no need for drastic adjustments.

Retirement Road Map uses conservative assumptions that are about half of the twenty year averages. Assuming slight increases in the assumptions are reasonable. Combining conservative assumptions with investing by phases and time horizons makes retirement plans secured. Plans don’t require major adjustments while in retirement – even when the completely unexpected happens.

Don’t your retirement clients deserve to have a retirement plan that takes advantage of the market and higher returns, but in a way that minimizes frequent adjustments and retirement income worries? They deserve a retirement plan made with Retirement Road Map.