Given my history with NASA and my love for the space program, I was glued to the screen on Wednesday, October 29th, 2014, when the unmanned Antares rocket bound for the International Space Station (ISS) exploded six seconds after takeoff. While there were no injuries or deaths related to the accident, the financial loss exceeded $200 million! Over two tons of equipment, experiments, and thousands of hours of work went up in flames in a matter of seconds.
As is often the case, daily events, especially one with such vivid imagery, begin to blend with my financial planner brain. This happens more often than I like to admit and my wife really enjoys the conversations that follow. OK…not really, but I digress.
My point being, you put years and tens of thousands of hours into building your retirement nest egg, into building your retirement plan. What happens when there’s an explosion six seconds after takeoff? In other words, what happens when you retire and tomorrow’s news is about a market crash? What if you had retired in August of 2008? Would your retirement plan withstand or would your nest egg be tomorrow’s scrambled mess? Would you be faced with the possibility of returning to the workforce or delaying retirement like so many Americans after the market crash of 2008-2009?
You don’t have to wonder. With the right retirement planning tools, you can stress test your portfolio against this very thing. We refer to it as the “Bad Timing” stress test. You can see how your retirement plan is affected after the worst historical 1-year or 2-year period of returns for your selected portfolio. You can set the “Bad Timing” to occur immediately or at any time in the future, such as next year, at retirement or 15 years into retirement.
Don’t simply wonder. Let’s find out what your future may look like. Let’s make a plan.
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