I've Had to Postpone Retirement

Over the course of the past six months, I've heard several anecdotal stories around delaying retirement due to 'the market'. While it's true that comparing a financial plan today to January 2022 probably looks less favorable, it's inappropriate to compare the two. There are two important points that come to mind here.

1.) According the JPM, the average intra year drawdown is 14%. While market action in 2022 has been unique, and painful at times, it will never be all clear once we get through the current thing. Environments like this will continue throughout a multi-decade retirement, so let this serve as a wakeup call to make sure a portfolio is aligned with a.) return requirements of a financial plan and b.) risk tolerance/capability. 

2.) Being a long-term investor is akin to running a marathon. Let's say your goal is to average an 8:00/mile, putting you at a ~ 3 hour 50 minute projected finish. Over your last 13 miles, you've averaged 6:00/mile putting you well above pace. Don't panic after running a 10:00/mile over the next few miles - it isn't going to throw goals off given what was banked during the first half of the race. Assuming reasonable and consistent assumptions, I can assure you that the August 2022 portfolio balance is far ahead of what was projected for it to be in August 2022 ten years ago.

This hypothetical portfolio return is for illustrative purposes only and should not be deemed a representation of past or future market or investment results.

Lastly, Charlie Biello discussed experiencing the misfortune of a devastating bear market during retirement. Some good perspective that I wanted to pass along - check it out here.

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^{Source: JPM Guide to the Markets}

^{The content in this  article was prepared by the article’s author. Voya Financial Advisors, Inc. does not endorse its content, and the views expressed may not necessarily reflect those held by Voya Financial Advisors, Inc.}