The concept and comparison of savings vs. investments is important to understand, especially for people planning their retirement. It isn’t discussed nearly as often as I believe it should be. In my opinion, this should be one of the initial conversations financial advisors have with people heading into retirement (or anyone for that matter). I talk more about this in the link above, so I’m not going to go into too great of detail here
I just wanted to quickly mention it because it ties in directly with what I’m about to share with you today—the actual planning part. This step involves the creation of what I call your “floor and upside.
Successful implementation of this concept plays a key role in building a foolproof cash flow plan.
It’s the part where we very strategically allocate your hard-earned money in places that will allow every one of your retirement goals to be met.
You’ve probably read and/or been told to avoid investing in the stock market in retirement. While your priorities do need to shift as you plan for retirement, avoiding the stock market altogether does not necessarily need to be part of that shift unless you want it to be. There is just a slightly different way you should approach the stock market in retirement.
The first step is locking in complete protection of a portion of your income…
This is called building your floor.