In this episode of the Secure Your Retirement Podcast, Radon and Murs discuss the crucial differences between investing before retirement and investing during retirement, and how your approach to risk, growth, and income changes as you move from the accumulation years to the de-accumulation phase. They break down why the strategies that work in your 30s, 40s, and 50s often need to be adjusted once you reach retirement, especially when protecting retirement savings and managing withdrawal needs.

Listen in to learn about how to adapt your retirement investment strategy using tools like the Three Bucket Strategy and strategic asset allocation in retirement. You’ll also hear why retirement income planning and retirement withdrawal strategy are essential for retiring comfortably while maintaining a growth mindset. Whether you’re 10 years from retirement or already there, this episode will help you refine your retirement savings strategy and create a plan to secure your retirement.

In this episode, find out:

• The key differences in financial planning for retirement during the accumulation and de-accumulation phases.
• How market downturns affect post-retirement investing compared to pre-retirement.
• Why the Three Bucket Strategy helps balance growth and safety for your retirement income planning.
• How asset allocation in retirement can help preserve wealth while still allowing for growth.
• The importance of retirement withdrawal strategy and tax-efficient income planning.

Tweetable Quotes:

• Radon Stancil: “When you lose 50% of your money in retirement, you don’t have decades to make it back—protecting your retirement savings becomes priority number one.”
• Murs Tariq: “The goal isn’t to stop growing your money in retirement, it’s to grow within reason so you can retire comfortably without unnecessary stress.”

Resources:

If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!

To access the course, simply visit POMWealth.net/podcast.

Here’s the full transcript:

Welcome to secure your retirement podcast, Murs and I are very happy to take some 

time to talk to you about a very important topic today and the episode here 

today is really talking about investing before retirement and then during retirement 

and the differences between that and here’s kind of the thought process 

behind it is when I’m younger and I’m in a growth mode and I can 

withstand letting my money just sit and grow and I could actually have markets that 

maybe you’re volatile doesn’t bother me. In fact, if you’re listening to today and 

Let’s say that you’re 60 maybe 65 and you think back to the last time that you 

saw Major downturn in the market that would take you back to 2008 Well, 

you were quite a bit younger in 2008, So you were probably working feeding your 401k 

and whenever that market turned down which by the way from the top to the bottom 

fell 58 % You probably Were maybe concerned or perplexed, 

but like I got plenty of time left to work. I’m just going to keep feeding it. 

And if you did what you should have done back then, you probably fed it even more 

because the market was so low. And so, you just put more money in because you knew 

you had a long-time horizon. Now if today, you are 6065 and you had that same 

scenarios happen, the stress level on that is going to be very, very different. Why? 

Well, because if you lose 50 % of your money now, you don’t have those decades to 

make it back. And it’s quite detrimental. In fact, we talk about this a lot when 

we’re talking to our clients. If I’ve got $100 ,000 and I lose 50%, 

how much money do I have? Well, if you’re doing that math with me really quick, it 

means you’ve got $50 ,000. Now, if the next year the market did a gangbuster year 

and made 50%, are you back to a break even? And the answer is no, 

you’re at 75 ,000. So, when you lose money, at the rate of, let’s just call it 50%, 

I have to make 100 % rate of return to make it back to a break -even. Not as big 

a deal if I’m younger and working and feeding, but if I am closer to or in 

retirement, that’s a really big deal. So, we have to really think about risk in a 

different perspective than we would when we were in our 40s or 30s or something 

like that. So, what we really are talking about today is, what type of things do I 

need to think about? What types of shifts do I need to make as I get closer to 

or in retirement? It doesn’t mean we’re going to get out of growth. It doesn’t mean 

we’re going to stop trying to grow our money, but we might have a different approach 

in saying, how much downside risk am I really wanting to be exposed to? 

And that’s really the day. So, uh, Merse, I think what we wanted to do is kind of 

hop over to your side and kind of talk about the two different phases specifically 

when it came to this idea before and during retirement. Yeah. So, two distinct phases 

that are talked about quite a bit in our industry, which is pre -retirement and then 

post-retirement. And what are the things that you do when it comes to 

retirement planning or really in this, in this, in this case investing in pre 

-retirement versus post-retirement. So, think of pre -retirement, that is another way to 

look at it as your accumulation phase. That is, you’re doing everything you can to 

sock away money for this distant ideal of retirement down the road. And hopefully 

you start early and you’re starting to save in your 20s and 30s and saving even 

better into your 40s and 50s, and you really get the power of compounding growth on 

the money that goes into those accounts. And 401(k)s, 

IRAs, 457s, 403 (b)s, the list goes on and on of these pre -tax types of retirement 

accounts. To me, in a way, they’re just a big funding vehicle with some benefits to 

them. thing about the 401(k), the more you put in there, the more it’s going to 

reduce your tax bill for the year if you’re using a traditional 401(k). 

And it has its own tax things that we have to think about down the road, but it 

becomes a massive incentive to put money in there so that we reduce our tax bill, 

but it’s really a funding vehicle for retirement, just like an IRA is or any other 

retirement based account. And so, like Radon was saying, in our younger years, 

as we are trying to accumulate wealth, we can handle some of those ebbs and flows 

of the market a lot better because we know we’ve got time ahead of us. And the 

phrase of like, think about the 2008 of buying the dip is a real possibility 

because we are working and earning and there are times where we have the cash on 

hand available to make that decision to say, “Hey, the market’s down 10%, 15%, 50%, 

let me dump some more money in there because I know I’ve got time to really 

benefit from that.” That changes a little bit when we get into post-retirement or 

no longer accumulation, we’re no longer working, earning, and saving, now we are 

still, now we are really spending that money. And that’s a bit of a hurdle for 

people in some of the meetings that we run, financial plan strategy meetings, and 

kind of walking through the financial plan and showing that this year, based off of 

the numbers, you’re going to have to withdraw $30 ,000, $40 ,000, $50 ,000 out of the 

portfolio, it can be a little bit nerve wracking to say how is that possible and 

how is that run rate going to be okay for the next 30-some-odd years? And so 

that’s the distribution or the de -accumulation phase of your life where you’re no 

longer earning, you’re living off of what you have or what you’ve done to prepare 

for retirement. So, in most cases, for most people, it’s going to be you’ve got so 

security as a fixed income. Some of you may have a pension, but then it’s really 

your investments, whether that’s the 401 (k)s, the IRAs that you’ve built up, maybe 

a brokerage account as well, cash in the bank. Maybe you’ve got some rental 

properties that are income generating, but that’s all, what have I done to prepare 

for retirement? 

And so, thinking that through, and here’s the key, I think sometimes the industry 

just says, when you retire, you need to be very conservative. We don’t agree with 

that. We think that there are ways that you should invest your money in different 

types of risk factors and different types of ways so that we pick up 

diversification, but in no way are we saying that, “Hey, we need to stop growing.” 

Absolutely, we need to continue growing the money, growing that bucket as best as 

possible within reason and within the risk that you’re willing to handle. But the 

distribution phase is very important, and getting that set up properly is really 

what’s going to lead to that comfort and that reliability and that peace of mind 

when it comes to retirement. Those are the two. Build that wealth and then 

eventually start spending it down. And then maybe we leave some behind to our heirs 

as well. So, Radon, let’s talk a little bit about goals people have when it comes 

to the pre -retirement side of it and then during retirement and things that we hear 

all the time from clients. – Yeah, I mean, if you think about it, if you’re still 

working and maybe now let’s talk about maybe your fifties and you’re still working, 

the goals usually at this phase are still the same. I mean, you’re trying to max 

fund your 401k. You’re doing the catch -up on the 401k. You’re trying to sock away 

as much money as you can. You’re probably still growth oriented in your portfolio 

because you know you’ve got another decade, really of work, a decade, decade and a 

half. And so, you might be starting to think about risk a little bit, but really 

you’ve still got enough to say, “No, we’re going to fund this 401 (k) as much as 

we can. We’re going to grow it as fast as we can, so we’re willing to take a 

little bit of risk because we’ve got that time.” And that’s all great. That’s all 

wonderful. Now, as I get into retirement, a couple things change. 

When I get to retirement, I’m no longer working. I’m not going to be max funding 

the 401 (k), so that’s not going to happen. I’m going to start to think about 

preserving my wealth. I usually say to people, our typical client, 

our statistical client, if you want to take it, they say this, I would like to 

make a decent rate of return and not lose a bunch of money. And that is exactly 

what our infrastructure is, is to say, how can we do, how can we avoid major 

losses? Now we’ll talk about this a little bit more, and we have a whole episode 

on this or topic, but one of the ways we do this is with a three-bucket strategy. 

Bucket number one is my cash. Bucket number two is my income and safety bucket. And 

then bucket number three is still my growth bucket. So, the only thing I did is 

instead of just leaving everything in the growth bucket, I moved some over into my 

income safety bucket because now in retirement, I’m going to need some safety and 

I’m going to need some income. So, if I’ve got enough money coming in on my income 

safety bucket, I can allow some volatility on my growth bucket. It just keeps the 

emotional roller coaster out of our head, right? So, we’re not that worried. Another 

thing that we have to think about during retirement are required minimum 

distributions. Now, that for most people, if you are in your 50s or early 60s right 

now, that’s going to be age 75. So, you’ve got some time and that gives you time 

to start planning. And some of the things you might want to start thinking about 

there is how do I get money from a tax deferred scenario to a tax -free scenario, 

again, kind of a part of this whole investment strategy of what I want to make 

sure, I think through. I also want to think about where do I want to take money 

from? For decades and decades, I worked, and I saved money and now I’m going to be 

in retirement and so now I’ve got to start taking money. Do I take that from my 

Roth IRA? Do I take it from my traditional IRA? Do I take it from my individual 

or joint account? Do I take it from the bank? Well, there are good strategies to 

think about when it comes to that. And one of the things that we provide for our 

clients are income strategies. What is the best way to take income to make ourselves 

tax -efficient, to deal with risk? So, those are all things that you’ve got to think 

through when it comes to this, the daring retirement element of things. Now, there 

is the investment side and we want to talk a little bit more about that. We’ll 

kind of talk a little bit more about the buckets as well. But we’ve got two topics 

we want to kind of move into here. Here really is risk management and then 

allocation really between those buckets. Yep. So, let’s talk about the phrase asset 

allocation. That’s a term that’s used a lot in our in our world. And so, but it 

can mean a bunch of different things. But in general, it’s saying how are we 

distributing the assets to in our portfolio, right? So, a simple way to look at it, 

the most commonly known model portfolio is that 60 /40 asset allocation, 

60 % towards equities, 40 % towards bonds or fixed income, and that’s been one of 

the more popular ones. That one has actually been, had a lot of issues here really 

since 2020 up until today with where rates are and everything like that in the 

interest rate side and bonds and the uncertainty around all that, but 60 -40, that’s 

an asset allocation, or you could have a 50 -50, right? If you’re in your pre 

-retirement stages of say you’re in your 20s to 50s, there is no one size fits all, 

but in most cases, you’re going to be a little bit equity heavy because you really 

want that growth, and you can handle the risk of the growth because you’ve got time 

ahead of you, right? If you’re in your 20s, you’re probably not planning on retiring 

until you’re in your 60s. You’ve got 40 years of growth and volatility that you can 

handle. And the rule of thumb is as you get closer to retirement, you should be 

reducing your equity exposure and increasing your safe exposure, 

your fixed income type of exposure. Again, that’s a rule of thumb. We have clients 

that are in their 70s and 80s that are a little bit more aggressive than some of 

our clients that are in their early 50s. So, a bit of this is your appetite for 

risk and how you approach it. But that’s really the idea is as we are younger and 

we have time on our sides and earning and savings capability, we can be a little 

bit heavier on the equity side. As we get retirement, you know, five years out, 

three years out. There is a natural shift that happens in our own, in our own, uh, 

behavioral side of things of, man, I’ve kind of got what I’ve got at this point. 

Yeah, I’ll save a little bit more over the next few years, but this is it. And I 

do want to retire and I do want to make this work. So, our behavior 

starts to say, tell us that we need to have a shift, uh, in an overall investment 

strategy. And it’s really having a plan in place so that when it comes time for 

retirement, we know exactly the buckets that we’re going to be drawn off of. We 

know what our exposure there is and everything like that. So, we fully believe when 

it comes time for retirement and setting up an income plan, like Raiden said, 

the buckets work really well. One, because it provides predictability, there’s this 

thing called sequence of returns risk. So, imagine all your money is in the stock 

market and you retire and then we walk into a 2008 type scenario or even more 

recently here at 2022 type scenario where the markets were down 20 to 30%. All your 

money is exposed to that. But also, on top of that, you need $5 ,000 a month out 

of that portfolio. So, the market is losing money, which means your portfolio is 

probably dropping as well as we are drawing on that money at the same time. That 

is a scenario where it makes it really hard to recover from because we’re drawing 

on it. That time horizon is now gone and we’re not putting money into it anymore. 

So, segmenting our money to do different things for us at different times, that’s 

what the buckets are. In our opinion, there’s two major buckets. You’ve got your 

cash, that’s kind of your emergency cash reserve, but the two major investment 

buckets are your income safety bucket and then your growth bucket. We want to have 

good growth and we want to have long -term growth and that’s really the stock market 

and tools within the stock market that are going to provide better returns over 

time, but we don’t want to have to rely on the stock market for our monthly 

paycheck. That’s why we allocate some of that money towards a safer bucket that is 

not correlated to what the stock market is doing, that has protections in place that 

we can’t lose money here, and also, it’s going to make us a decent rate of return, 

bond like return or better than the bond market without the risk of the bond 

market. So that now when we do retire and we do walk into a market downturn, 

well, yeah, we may lose some money in the growth bucket, but our spending money is 

preserved for a significant period of time. So, we’re taking our withdrawals from that 

safety bucket. And now what we’ve done is we’ve bought time for the growth or the 

stock market to recover. And so, to us, that’s really important to kind of optimize 

our investment strategy, but also just make it so that we’re not so stressed about 

the market every single day. And so that is something I think is what we coach on, 

we’ve done several podcasts on, and we know it works very well. We see the 

successes of it all the time. Is it the plan that’s going to make you hundreds of 

very extreme high rates of returns in the ’20s and ’30s and ’40s? You may have a 

year like that here and there, but that was for your ’20s, ’30s, and ’40s is to 

make those types of rates of return because you could handle that risk. When we go 

into post-retirement and spending that money, we want to grow, but we also want to 

grow within reasons that we’re not uncomfortable with the amount of risk that we’re 

taking. So, Radon, I know you were talking about some stories that you’ve got with 

clients that have kind of gone through this, and let’s talk a little bit about 

that. Real quick on this one is that we had a client, he came to us before he 

was a client in 2007. Now if you remember, 2007 was the top of the big housing 

boom. And when he came to us, he had retired from a company that he had an 

executive pension and he had a base pension, and he had his social security was 

going to be starting. So pretty much he said, hey, this sizeable 401k, that’s not 

for me. That’s for the kids. I don’t need it. I’ve got more money coming in than 

I can spend. Well, then came 2008. By the way, I’m sorry, he did become a client 

And we did have a lot of conversations with him, and we did decide that we would 

still do this bucket strategy. We would still put some money in places to keep him 

secure and safe and be able to manage the risk. And then after becoming a client, 

2008 hit, the market dropped considerably. Then came 2009 and the company that he 

retired from filed bankruptcy. And when they filed bankruptcy, he lost his executive 

pension. The base pension was covered by the federal government, the executive pension 

was not, so he was back in the office saying, “Hey, I’m going to lose my executive 

pension. Let’s come up. We’ve got to come up with an income plan now, because now 

I don’t have enough coming in.” And I just wanted you to visualize how happy do 

you think he was that we had put protection and risk management on that sizable 401 

(k). And really, who got affected here in this deal? Really, the beneficiaries. 

They’re not going to get as much, if they didn’t care that wasn’t their plan, the 

parent’s plan was that they just needed to have a good plan in place. And the 

kids, by the way, we know them still today, they were happy that mom and dad had 

a good retirement. So that is the power of how we would shift pre -retirement to 

during retirement. And just to wrap things up here really quick, Murs, if you just 

want to let folks know here in the last couple of minutes what it is that they 

need to make sure they’ve gotten place so that they understand exactly what they’ve 

got. Yeah, so bringing this full circle, how do we put this into action? Well, 

everything that we do, and we believe starts with this idea of a retirement focused 

financial plan.