By Susan Elise Campbell
Retirement plan holders went on a historic roller coaster ride this past year, but to their credit they held on tight, said local investment professionals.
“Fortunately no one panicked in March,” said Mark Wells, CFP, co-founder of Three Buckets Wealth Management serving clients out of Fort Covington and Glens Falls.“In all aspects of life, when things are up in the air it’s easier to act irrationally.”
Uncertainty is what no one wants, said Wells.
The Three Buckets formula is to determine guaranteed income sources such as Social Security and pension, then calculate the gap between that amount and what the client wants to live on in their retired years, he said.
With a comprehensive plan and short, intermediate and long-term investment buckets in place, Wells said “clients understood how unexpected market swings can affect their overall goals and therefore did not act emotionally” when COVID-19 drove down the stock market.
“Who could know how the pandemic would play out?” said Conor Boyd, managing partner of Thoroughbred Advisors, which has a Queensbury office. “But we were prepared by being positioned in such a way that we could take advantage of opportunities.”
Boyd highlighted the need for a strong liquidity position in any portfolio, through cash equivalents and a guaranteed portion, which is traditionally fulfilled by insurance products.
“One end of the advisory spectrum is investment and the other is insurance, an area in which some advisers fall short,” said Boyd.
He promotes three factors to successful retirement planning. “The first is a focus on habit formation, which includes automated savings. Next are the tools, including investments and insurances. The third is the strategy that informs the habits to create and the tools to implement.”
At Minich MacGregor Wealth Management in Saratoga Springs, financial planner Cory Laird, CFP said the methodology is “to determine the risk profile and make sure clients are getting the growth rate they’re expecting and the amount of sleep that they want at night” using a sector rotation strategy.
“Even if we see a couple of down years, customers can still be comfortable,” he said.
With COVID’s striking impact on investments, Laird said “by the time clients got their statements the first week in June, the markets were already improving.”
Now, with a new year and a new administration ahead, professionals are focusing on planning techniques that help retirement account holders meet goals beyond simply accumulating money.
By Susan Elise Campbell