Thirty-two (32) years ago; financial advisors like myself were trained to view or approach retirement planning as creating a comprehensive financial plan with a specific monetary target and to ensure; our client’s retirement portfolios were designed to provide multiple streams of income; via a wide array of income sources. Today; those principles are still valid; however, instead of only 1 or 2 investment options; we now have literally hundreds of investment opportunities...
As much as a future capitalized account (factored for inflation) is critical; over the last 30 years; retirement planning has morphed to include a refined pathway; yes; we need the collateralized nest egg, but we are now trained to go one step further and focus on the ‘lifestyle our clients’ would like to enjoy; during their golden years. Lifestyle choices such as travel, vacation property, small business...
One of my clients Mary is 86 yrs. old today; however, her story started as she approached her 65th birthday in 1998. Mary had been patiently waiting on her 65th birthday; the last day she would have shown up to work; but more excitingly; it would have been the time for Mary to pack her suitcases, as she was about to kick off a travel tour; where she would visit 25 countries on her bucket list.
Mary was so focused on her retirement lifestyle; she never stopped to think of the amount of money she would need to accomplish her goal; of course, she had me to remind her as she knew I had a specific investment account set up to fund her travelling aspirations.
One of my all-time excellent writers is Stephen Covey; who wrote in his bestseller; ‘7 Habits of Highly Effective People', that Habit #2 was to; ‘begin with the end in mind’.
Whether Mary was a highly effective person or not; was not the issue; she had me for that; so, I began Mary’s journey 30 years ago; with a specific end in mind; worldwide travel to 25 countries.
The cost of this expedition required a non-registered account with $100,000 CDN; may be higher if she decided to go on a spending spree across Europe and or Asia-Pacific. However; any purchases over and above her $100,000 travel account; was 100% up to her; however; regardless of Mary’s impulse to shop; we ensured she would be okay. How?
We had a separate account intentionally labelled to fund her life-long goal; you see communication is the most important function of a financial advisor-client relationship; I’ve managed her investments for over 30 years; during that time, I got to know Mary very well and the minute I concluded she had the ‘potential to be impulsive and go on a shopping spree; I began diverting assets into a sub-account; labelled ‘Mary’s Impulsive Shopping Account’; it worked 😊.
Mary’s Profile: Unfortunately; Mary’s late husband passed away in 1988; thankfully, his Life Insurance policy paid off their mortgage on the family home; they had no children; or real beneficiaries (except her church) so, without anyone specifically to leave money to; Mary decided to live her golden years at her fullest and I supported her 200%!
Issue: It was now late 1997/early 1998; we had just witnessed a major correction triggered by the Asian market crash; for some of you who were old enough to remember; we suffered one of the most significant and devastating market pull-backs and corrections Canada had ever seen. During this period; we saw ten (10) years of portfolio growth disappear literally overnight and if your investments were in stocks, bonds or mutual funds; you were in trouble; especially, if you needed your funds to live on!
Why? The minute you liquidate or cash-out your investments you’re denying the portfolios ability to recover any incurred ‘paper losses
Vital Tip: Never liquidate an appreciating asset to provide funds for no real reason. (Reach Out to Me and We’ll Discuss).
Mary was in trouble; her life-long travel plan was about to blow up in her face and I couldn’t even fathom the psychological negativity of a blow-up of this magnitude. However; Mary had an ace up her sleeve; it was called her trusted financial advisor and she knew; I would have come up with a painless solution; which I did.
Our backup Plan: Today, it’s called; Retire-Rite Lifestyle Solution™; one of the features of my strategy is to access alternative funds without touching deflated investment accounts; by doing so, you’re giving them ample time to recover. With the 1997-1998 market correction; it took almost 3.5 years to recover and regain parity.
Do us a favour; hop on over to our Facebook page www.facebook.com/retireritelifestylesolutions and check out our articles; read our blogs, then like, comment and leave a note.
Conclusion: I was able to help Mary secure a $200,000 cash advance (tax-free); so, it didn’t affect CPP or OAS Clawback; the advance did not require servicing; nor did we have a repayment timeline.
Instead, Mary was able to go on her travel tour; 100% Stress and Worry-Free, as she knew, not only did she have access to $200,000; she now had the luxury to wait on the Stock Market to fully recover; WITHOUT triggering a penny of losses. For more information; or to discuss RRLS; contact me via email@example.com.
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