Corey Baker discusses the importance of the sequence of returns risk
Listen to the interview on the Business Innovators Radio Network: https://businessinnovatorsradio.com/interview-with-corey-baker-discussing-sequence-of-returns-risk/
Retirement specialist, Corey Baker discusses the concept of sequence of returns risk. Corey breaks down the importance of understanding sequence of returns, relating it to the power of annuities in retirement planning. He shares insights into how market volatility can impact their retirement accounts and the significance of being aware of sequence of returns risk for financial security.
Sequence of returns risk is a critical factor to consider in retirement planning, especially when market volatility impacts the ability to draw from retirement accounts. As discussed in the podcast episode, sequence of returns risk refers to the situation where a retirement account experiences negative returns due to market fluctuations while individuals need to withdraw funds from the account. This scenario can have a detrimental impact on retirees, particularly those relying on their retirement savings to cover living expenses.
Corey Baker, highlighted the potential consequences of sequence of returns risk, emphasizing how market downturns can significantly reduce the value of retirement accounts. For instance, if an individual experiences a 50% loss in their retirement account, they would need a 100% return just to break even. This demonstrates the challenge of recovering from significant losses in a retirement portfolio, especially for individuals already drawing on those funds for income.
Moreover, the discussion touched upon the psychological aspect of dealing with market volatility and losses in retirement accounts. It was mentioned that individuals often feel the pressure to catch up and take more risks to recover from losses, which can lead to a cycle of chasing returns and potentially incurring further losses. This behavior can be detrimental to long-term financial security and stability in retirement.
To address sequence of returns risk and mitigate its impact on retirement planning, Baker introduces the concept of fixed index annuities with income riders as a potential solution. These financial products offer a way to protect the principal
Corey Shared “My mission is to help you win with your retirement dollars plain and simple. Life is too short and you worked too hard to have your retirement dollars at risk. I help people identify problems with their financial plan for the future and offer solutions solve them”
Overall, Corey underscored the importance of understanding and addressing sequence of returns risk in retirement planning. By being aware of the potential challenges posed by market volatility and implementing strategies to protect against losses, individuals can enhance their financial resilience and security in retirement.
About Corey Baker
Corey is originally from the Chicago area and is a lifelong Cubs and Bears fan. He and his wife Julie have 2 daughters and an incredibly spoiled poodle. As a former minister of one of the fastest growing churches in Florida, Corey has extensive experience connecting with people and assisting them to become the best versions of themselves in every area. In 2017, Corey and his family relocated to Lexington, Kentucky where he now has dedicated himself to helping families and individuals all across the Midwest thrive with their retirement, and with their money.
Corey is also a best-selling author, accomplished motivational speaker, and personal health and wellness coach. His life’s passion is working with people and he is tenacious in his dedication to helping others win. In his spare time, Corey loves to travel all across the US pursing his other life passion, which is bowling.
Learn More: http://www.kkandb.com/
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