{"id":33423,"date":"2020-07-16T16:58:46","date_gmt":"2020-07-16T20:58:46","guid":{"rendered":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/?p=33423"},"modified":"2020-07-16T21:39:31","modified_gmt":"2020-07-17T01:39:31","slug":"business-report-lower-reliance-rate-during-retirement","status":"publish","type":"post","link":"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/07\/business-report-lower-reliance-rate-during-retirement\/","title":{"rendered":"Business Report: Lower \u2018Reliance Rate\u2019 During Retirement"},"content":{"rendered":"<figure id=\"attachment_33424\" aria-describedby=\"caption-attachment-33424\" style=\"width: 150px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"size-thumbnail wp-image-33424\" src=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/07\/edward-jones-meghan-murray-c-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/07\/edward-jones-meghan-murray-c-150x150.jpg 150w, https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/wp-content\/uploads\/sites\/109\/2020\/07\/edward-jones-meghan-murray-c-65x65.jpg 65w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><figcaption id=\"caption-attachment-33424\" class=\"wp-caption-text\">Meghan Murray is a financial advisor with<br \/>Edward Jones Financial in Queensbury.<\/figcaption><\/figure>\n<p>By Meghan Murray<br \/>\nIf you have decades to go until you retire, you don\u2019t need to panic over volatile financial markets. You have plenty of time to regain lost ground and potentially achieve more growth in your investment portfolio.<br \/>\nBut what if you are nearing retirement or already retired? After all, you will probably need to draw on your investments to pay for some of the costs associated with housing, food and the many other expenses you incur in daily life. So, is a down market cause for alarm?<br \/>\nIt shouldn\u2019t be. And you can help reduce your stress level by understanding your \u201creliance rate.\u201d As its name suggests, your reliance rate tells you how much you rely on your portfolio\u2014rather than other sources, such as Social Security or a pension\u2014to meet your income needs during retirement. <!--more-->So, for example, if you need $60,000 each year, and $40,000 comes from your portfolio, your reliance rate is 66 percent.<br \/>\nYour reliance rate can influence your emotions and investment behavior. A higher reliance rate may tempt you to make emotional decisions during a market decline, since your portfolio is supplying more of your needs.<br \/>\nHowever, if you respond to a steep market drop by making dramatic changes to your portfolio, you may actually increase the likelihood that your money may not last. This is especially true if you move a large portion of your portfolio to cash, as cash does not typically provide growth potential to help keep up with inflation.<br \/>\nThere is no \u201crecommended\u201d reliance rate for everyone, But, as a general rule, the higher your reliance rate, the more sensitive your portfolio may be to fluctuations in investment prices. What can you do, then, to either lower this rate or, at least, moderate the risk level attached to it?<br \/>\nHere are some suggestions:<br \/>\n\u2022 Adjust your expenses. During retirement, some of your expenses, such as commuting and other costs associated with work, will go down, but others\u2014particularly health care\u2014will go up. You can\u2019t control all these expenses, but the more you can keep them under control, the less pressure there will be on your investment portfolio to provide you with income.<br \/>\n\u2022 Review your plans for Social Security. You can file for Social Security benefits as early as 62, but your monthly checks will then be reduced by about 30 percent from what you\u2019d receive if you waited until your full retirement age, which is likely between 66 and 67. You can receive even more if you wait until 70, at which point your benefits will \u201cmax out.\u201d So, if you can afford to push back the date at which you start taking Social Security, you could lower your reliance rate.<br \/>\n\u2022 Keep cash and short-term investments in your portfolio. Try to keep about one year\u2019s worth of living expenses in cash or cash equivalents, and about three to five years\u2019 worth of expenses in certificates of deposit and other short-term income-producing vehicles. Having these assets available can help you avoid liquidating long-term investments when their prices are down.<br \/>\nYour investment portfolio will certainly be a key source of your retirement income. And by understanding how reliant you are on your portfolio, and the options you have for reducing this reliance, the better prepared you\u2019ll be to withstand the inevitable market downturns.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Meghan Murray If you have decades to go until you retire, you don\u2019t need to panic over volatile financial markets. You have plenty of time to regain lost ground and potentially achieve more growth in your investment portfolio. But what if you are nearing retirement or already retired? After all, you will probably need [&hellip;]<\/p>\n","protected":false},"author":196,"featured_media":33424,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\r\n<title>Business Report: Lower \u2018Reliance Rate\u2019 During Retirement - Glens Falls Business Journal<\/title>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.glensfalls.com\/glensfallsbusinessjournal\/2020\/07\/business-report-lower-reliance-rate-during-retirement\/\" \/>\r\n<meta property=\"og:locale\" content=\"en_US\" \/>\r\n<meta property=\"og:type\" content=\"article\" \/>\r\n<meta property=\"og:title\" content=\"Business Report: Lower \u2018Reliance Rate\u2019 During Retirement - Glens Falls Business Journal\" \/>\r\n<meta property=\"og:description\" content=\"By Meghan Murray If you have decades to go until you retire, you don\u2019t need to panic over volatile financial markets. 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