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#003 – Why I Left Wall Street Big Banks to Safeguard People’s Retirement

JANUARY 28, 2020

The day I left Wall Street big banks to safeguard people’s retirement was the day my life – as well as the lives of many of my clients – changed. That’s because rather than leading clients down a path that could potentially destroy all that they’d built financially, I helped them to keep their principal safe, while at the same time providing them with a reliable, ongoing retirement income stream that they could count on, regardless of how long they needed it. Most Wall Street firms sing the praises of risky equities and downplay safe or “protective” financial vehicles. But not having at least some amount of certainty in the future can lead to a retirement that is filled with worry about whether or not your money will last. Is that really the kind of retirement lifestyle you want to live?

Why You Should Be Cautious When Relying on Average Returns

If you’ve purchased any type of investment, it is likely that your financial advisor told you all about its average return in the past. But past performance is never an indication of future investment returns. On top of that, even if an investment generates a nice average return, the order in which its returns are received can make a tremendous difference in how long your portfolio – and in turn, the income that is generated from it – will last. As an example, throughout your working life, you may have been told by financial advisors that fluctuations in your investments don’t really matter because “the market always eventually comes back up.” That’s bad advice – You see once you retire the way you manage money changes forever. If you receive a negative return early in your retirement at the same time you are taking income out it can cause your portfolio to run dry, even if it has the same overall average return as another. For instance, consider two investors who each have $100,000 in their portfolio and each is taking 9% per year out of their savings to use for paying their living expenses in retirement. But, even though both of these retirees receive the same average return of 7%, they have drastically different results in terms of when they run out of money. In fact, because Investor #1 earned a negative 13% return in Year 2, rather than in Year 3, their portfolio was depleted six years earlier than Investor #2’s portfolio.
Year 1Year 2Year 3Ave. ReturnYears Until Depleted
Investor 1+7%-13%+27%+7%18
Investor 2+7%+27%-13%+7%24
This is why the sequence of returns in your portfolio can be particularly dangerous during the few years immediately before and immediately after you retire. But there are ways to eliminate the sequence of returns risk and to instead count on a guaranteed income for life, no matter what happens in the market. That is through an annuity. While many Wall Street “bigwigs” advertise their hatred for annuities, the truth is that an annuity is the only financial vehicle that can provide you with an ongoing stream of income for life without worrying about the ups and downs of the stock market or changes in interest rates over time.

Are Wall Street Firms and Big Banks Sabotaging Your Retirement Income?

Even if you’ve built up a nice sized portfolio, you could have a false sense of security regarding the success of your retirement income plan. That’s because Wall Street firms are all about offering “opportunities” to increase wealth rather than helping investors put a reliable, guaranteed income plan in place. This is what we’ll be talking about in our next podcast. In this candid interview, I explain why I left the Wall Street big banks and took the reins of leading Annuity Gator. I reveal why I adamantly disagree with the “conventional” financial advice that is typically given to retirees. You will also discover some of the most common mistakes we see retirees making today – and what you should do instead. In addition, we will also help you to compare and contrast the pros and cons of working with local financial advisors versus one who is “virtual,” and how technology is shaping the way consumers receive retirement planning guidance. So, be sure to tune in so you can determine whether or not your current retirement income plan is on the right track – and if not, what you can do about it now. Listen to the episode on Apple Podcast, Google Podcast, Spotify, Stitcher, or on your favorite podcast platform. Why I Left Wall Street Big Banks to Safeguard People’s Retirement

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