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3-2-1 Retirement Newsletter (3-5-2020)

March 5, 2020

3 insights, 2 findings, 1 action 

5-Minute Read

Here are three insights, two findings, and one action for the week...


I. Retirement: Expectation vs. Reality

As we are reminded on what seems like a daily basis these days, nobody knows what tomorrow will bring. What unforeseen natural or man-made event will roil the markets next, or what storm will come up overnight to rock our collective financial boats? No way to tell. The only sure thing is unforeseen events will keep happening, one after another. That's the definition of the future…lots of stuff happening that we won't know about until it gets here. 

This means retirement expectations will probably be something different from retirement reality.   


II. 7 Reasons to have an estate plan

  1. None of us know what tomorrow will bring
  2. Identifies who oversees your finances if you’re sick or disabled
  3. Identifies who makes medical decisions for you if you’re sick or disabled
  4. Ensures your wishes are fulfilled after death
  5. Minimizes and eliminates the costly and time-consuming probate process
  6. Establishes guardianship for minor children
  7. It provides peace of mind and reduces stress on your family

III. How to pay for long-term care

At some point, roughly 60 percent of the U.S. population will need long-term care services. So it’s not a question of whether it will be needed but when and how to pay for it. While we cannot pinpoint when the need for long-term care arises, we do know the options for paying for it. These are self-funding, government programs, and asset-based products.

NOTE: Medicare (government program) can cover some post-acute care services. This coverage comes with extremely limited benefits and strict eligibility and does not cover long-term institutional care.

Funding Options


I. The coronavirus and your investments

Who hasn’t been rattled by stock market ups and downs the past few months? Whether it’s driven by company profit reports, political events, trade wars, and now the coronavirus, it’s always a newsmaker and the stuff of bedtime worry. We cannot control what the markets will do, but we can control how we react. This begins with revisiting those goals and their strategies to remind us why we did the work in the first place. This is where investment discipline comes into play. We all realize risk and reward are two sides of the same coin. And we have to accept some measure of risk if we hope to reap the reward. That means trusting your asset allocation (strategy) to reach your intended retirement (goal). Sticking to your strategy isn’t always easy, but it’s the only way to harvest the long-term returns needed to build your retirement portfolio and reach your goals. 

Source: The coronavirus and your investments

II. What to make of market volatility

We often forget that financial markets, for any number of reasons, have a habit of behaving unpredictably in the short run. And we would be well-served to remember the markets have rewarded investors over the long term. Having an investment approach you can stick with—especially during tough times—may better prepare you for the next crisis and its aftermath. A key point raised here is in advance of such periods of discomfort (here’s looking at you, coronavirus): having a long-term perspective, appropriate diversification, and an asset allocation that aligns with your risk tolerance and goals can help you remain disciplined enough to ride out the storm.

Source: What to make of market volatility




I. One task you must complete to successfully transition into retirement

Well-established research indicates there are 15 developmental tasks you need to complete while still working to transition into retirement. 

We’ll look at one of these tasks for our action item this week and reveal a new one each week.

The completion of these tasks does not suggest a person should retire. However, failing to complete the tasks will put a successful transition into retirement at risk.

This week’s task is associated with planning: You need to develop an alternative plan that could get you through a considerable and unexpected setback in retirement.

An alternate plan:

  • can improve the primary plan by identifying its shortcomings

  • can provide another option to go along with the great and not-so-great options

  • can provide peace of mind knowing the worst case has been accounted for

  • can help clarify and prioritize goals and risks

  • can help you visualize what a considerable and unexpected setback in retirement would look like


    Have a Question? Want to chat about it?


    Until next week,

    Mark Sharp, CFP® RICP® EA