Diane, 61 and 90 days from retirement with $420,000 saved, held a portfolio built for growth instead of income. Robert told her it exposed her to sequence of returns risk the moment withdrawals began. She nearly left, heard from two other advisors that everything looked great, came back and retired on time with income layers in place.
What did Robert tell Diane?
Robert describes a client he calls Diane. She was 61, with $420,000 saved, 90 days from her planned retirement date, and she came to him because her previous advisor had retired. In their first real planning meeting he told her something she did not want to hear. The portfolio she had held for eight years looked fine on the surface: strong past returns, recognizable fund names, clean statements. Underneath, it had a structural problem. It was built for growth, and she was about to start drawing income from it. Three months from retirement, that exposed her to sequence of returns risk: once you pull money out in a down market, the math works against you in a way time cannot repair.
How did she take it?
Not well, at first. She pushed back: “My last advisor built this portfolio. Are you telling me he was wrong?” Robert answered, “I’m telling you it was right for that season of your life, but it’s not right for this one.” She crossed her arms, went quiet and said she needed to think about whether this was the right fit. He told her that was fair and to take her time. He did not chase her, and he did not soften what he had said to keep her comfortable.
Three days later she called. She had talked to two other advisors after leaving his office, and neither had mentioned a single thing he raised. Both told her everything looked great. That, she said, scared her more than what he had told her.
How was her plan restructured?
Over the next 60 days they rebuilt it in income layers, so her first ten years of retirement drew on sources that did not depend on daily market swings. The order of her withdrawals mattered as much as what she owned, the subject of the answer on which account to draw from first. She retired on time. Four years into retirement, by Robert’s account, she has not lost sleep over a bad market week.
What should you expect from an advisor?
Robert’s view is that an advisor’s job is to make sure your plan works when it is tested, and a comfortable meeting is beside the point. Your plan will be tested: markets correct, economies shift, conflicts break out and inflation returns. The question is whether you built your retirement around the world that exists or around a best-case scenario. If no advisor has ever given you the uncomfortable version of the truth, you may not have the full picture. His 30-minute retirement clarity call is that conversation.
Common questions
- What is the difference between a growth portfolio and an income portfolio?
- A growth portfolio aims for long-term returns and accepts large swings along the way, which suits the years you are adding money. An income portfolio is arranged so the next several years of withdrawals come from sources a market drop cannot force you to sell.
- When should you restructure a portfolio before retirement?
- Before withdrawals begin, while a decline cannot yet force you to sell. Diane’s restructuring took 60 days and finished before her retirement date, which is tighter than most couples should plan for. Two to five years out gives you more room.
- Why would two advisors miss the same problem?
- A portfolio can look healthy on every measure an accumulation review checks: past returns, familiar funds and clean statements. The risk shows up once you ask how the next ten years of income will be paid, which is a retirement income question.
If the decisions on this page are ahead of you, the two of you can work through them with Robert Boeck before any of them becomes permanent.
Schedule Your Consultation