Brian Decker, Owner, and Founder of Decker Retirement Planning joined Janeen to talk about how do we protect our retirement against rising interest rates.
Rising interest rates cause bond prices to go down. If you think that interest rates, near record lows right now, will be trending higher from here then I hope you don’t own bond funds in your retirement portfolios
Brian is talking about how we protect ourselves from market crashes if we don’t own bond funds? He tells viewers that this is tricky. Traditionally, retirees have been told to own a 60/40 stock to a bond portfolio. Can you afford to have 40% of your portfolio in bond funds where they pay almost nothing and LOSE money when rates go higher?
No, Of Course not! BUT, can you afford to be 100% invested in the stock market and risk losing 50% from here? Also No! How do you reconcile those two “No’s”?
Retirees need to have safe money and most Decker Retirement Planning clients have about 25% risk exposure NOT 40%. They believe that is too much. However, some principal guaranteed accounts do NOT have interest rate risk and have averaged a 6% return over the last several years. That is what Brian and the Decker Retirement Planning team recommend for their clients; less risk and higher returns.
Bond funds are one of the WORST investments out there right now. If your advisor is telling you that your SAFE money should be in bond funds when interest rates are THIS low, Decker Retirement believes you should look for a different advisor because interest rate risk has never been higher for bond funds. Bond funds are NOT safe when rates are this low!
If you want to learn more, please visit the Decker Retirement website and sign up for a FREE Safer Retirement toolkit. The free toolkit includes 2 books and a sample income plan to help you learn more about what your retirement could look like. The FREE toolkit has a 34-point checklist challenge to help people know if they are ready to retire and also, the book has a section dedicated to this topic specifically.
Brian and the team at Decker Retirement Planning are here to help. Get started today with the FREE toolkit!
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