From Retirement Now Newsletter June 10th 2021
I was reading in the news the other day about an artist who sold an “invisible” statue for eighteen-thousand smackeroos!
And it got me to thinking about most retirees’ ultimate fear: running out of money in retirement.
Here’s what I mean…
If you haven’t seen the story in the news, here’s a little background. An Italian “artist” named Salvatore Garau auctioned off an invisible sculpture for 18,300 dollars. But they started lower than that. The price was bid up to that amount. And the sculpture is “immaterial” which is another way of saying “it doesn’t exist because there’s nothing there.”
And he’s created “immaterial” sculptures in the past. One that sits in the street of Milan, Italy. Or I should say at least there is a taped off section where the immaterial sculpture sits.
He claims his sculpture isn’t nothing, but is instead a vacuum. In his own words…
“The vacuum is nothing more than a space full of energy, and even if we empty it and there is nothing left, according to the Heisenberg uncertainty principle, that ‘nothing’ has a weight. Therefore, it has energy that is condensed and transformed into particles, that is, into us.”
If you can explain what that means, hit Reply to this email and explain it to me.
Long story short… there’s nothing there.
And although a crafty artist can get away with saying there’s something there, a retiree who runs out of money in retirement cannot pretend that he has a real portfolio when it has been fully depleted.
Since retirees live in the real world, they can’t take withdrawals from an “invisible” portfolio. And calling it a “vacuum” hardly helps matters when the bills need to be paid… no matter how much “energy” is in the space.
Which is why many savvy retirees prefer to take steps to help preserve their portfolios throughout their entire retirement. Some of the things they do include:
-Set aside 6-12 months of cash that could cover their expenses
-Use non-market related assets to cover expenses if their portfolio is temporarily suffering a down market
-Take flexible withdrawals from their portfolio to help avoid selling shares at a loss.
-Use guaranteed income options if their Social Security is not sufficient to cover basic living needs
-Use guidelines to understand when it is safer to take bigger withdrawals from their portfolio when the markets go up a certain percentage
-Proactively plan their taxes each year to help minimize what they must legally pay to the IRS
Just to name a few.
Conclusion: Anyway, I hope these bullet points help in your efforts to preserve your portfolio throughout your entire retirement. And if you’re worried about how these points may relate to your personal circumstance feel free to click here to have a 15 minute phone chat with me and we’ll help point you in the right direction.