Helping Clients Avoid Retirement RuinMichael Kirsh
May 21, 2009 — 1,192 views
As clients struggle to come to grips with the new reality, they are faced with two unpleasant choices. "Do I protect the money I have left and invest in low yielding safe-investments, with no hope of ever recovering, or do I follow conventional wisdom and remain invested in equities and hope for the best?" Clients age 60 and over are especially vulnerable since required distributions must begin at age 70 1/2. To appreciate the value of what follows, it is important to first understand the impact withdrawals have on an investment portfolio. We know that a loss of 20% requires a 25% gain to break even. Add a 4% withdrawal, and you need a 42% gain over the following three years just to break even. Should distributions begin in a declining market, the portfolio goes into an irrevocable downward spiral. Now you know why the government suspended required minimum distributions for 2009.
For clients who fit this profile, there are financial tools available that can restore a significant amount of lost value, and convert this value into a secure retirement income stream at age 70½.
Please feel free to contact me.
Michael Kirsh Founding principal of Kirsh Financial Services, Inc. Has been solving the problems of closely held business owners in the areas of business succession and retirement planning since 1977 Recognized authority on the subject of sophisticated insurance planning with many publishing credits to his name Has addressed numerous seminars and workshops on these subjects around the country Certified financial planner, accredited estate planner and charted life underwriter Listed in Who's Who in Finance and Industry, and Who's Who in the World.