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Owning Stocks in Retirement: Why We Do Buckets- Season 6: Episode 9

Have you ever heard the idea that stocks are too volatile for retired people to own?  There’s even an old rule-of-thumb formula that tells you to decrease your stock holdings by 1 percent every year and replace them with bonds.  These generic “guidelines,” though, are hardly prudent advice for most people, because everyone’s situation requires a different approach.

It may actually be more beneficial for some people to hold steady — or even increase — their exposure to stocks as they get older.  What often matters more is having a suitable withdrawal strategy: one that aims to take volatility into account, potentially avoiding selling stocks when they’re declining in value.

In this week’s episode of Managing Your Financial Future, podcast host Johnny Dean talks with “Professor ” Rick Plum, CFP® about why a “Buckets” strategy may help to actually counteract the effects of market volatility on a retiree’s portfolio.

Important Information:

The information provided should not be considered specific tax, legal, or investment advice and is not specific to any individual’s personal circumstances. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investments purchased and/or investment strategies devised by Lucia Capital Group (“LCG”)) will be either suitable or profitable for a client's or prospective client's portfolio, thus, investments may result in a loss of principal. Accordingly, no client or prospective client should assume that the presentation (or any component thereof) serves as the receipt of, or a substitute for, personalized advice from LCG or from any other investment professional.

You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal. This material was gathered from sources believed to be reliable, however, its accuracy cannot be guaranteed.

It is important to keep in mind that investments in fixed income products are subject to liquidity (or market) risk, interest rate risk (bonds ordinarily decline in price when interest rates rise and rise in price when interest rates fall), financial (or credit) risk, inflation (or purchasing power) risk and special tax liabilities. Interest may be subject to the alternative minimum tax. Treasury securities are backed by full faith and credit of the U. S. Government but are subject to inflation risk.

Rick Plum is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC. The investment professionals are affiliated with LPL Financial and are conducting business using the name Lucia Capital Group, a separate entity from LPL Financial.

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