Too Much Risk Can Derail Your Retirement

By Brett Gottlieb

Retirement is an exciting stage in life most people eagerly anticipate. It’s a time when you can take a break from your regular routine, have more free time, and live life the way you want. But to fully enjoy this new phase, it’s crucial to have a well-thought-out plan for generating income during retirement. How can you be confident you’ll have enough money to cover your expenses for the next 20 to 30 years?

Planning and managing your finances during retirement is quite different from saving money while still working. It involves a whole new set of things to think about and requires a different approach—both in terms of technical aspects and how you feel about it. Whether you’re just beginning to think about retirement or you’re already enjoying your retired life, we hope this article provides perspective and support to help you navigate this exciting new phase.

Safe Withdrawal Rate Can Be More Important Than Rate of Return

When it comes to retirement planning, many people focus solely on the rate of return they can expect from their investments. However, what is often overlooked is the amount you will be withdrawing from your retirement fund each year. This is where the concept of a safe withdrawal rate comes in. How much can you withdraw from your accounts without risking running out of money later on in life?

The most commonly cited safe withdrawal rate is the 4% rule, which is the theory about how much money you can safely withdraw from your retirement accounts each year without running out of money. The 4% rule became widely publicized after Bill Bengen’s research in 1994, which showed that withdrawing up to 4% of retirement assets, and then adjusting annually for inflation, could sustain the typical 30-year retirement going all the way back to 1926.

On the surface, it may seem like withdrawing 4% is definitely the way to go. After all, the data goes back nearly 100 years! But it is important to keep in mind that the safe withdrawal rate is just a guideline and should be adjusted according to your personal financial situation and goals. Nevertheless, when you reach retirement and start taking an income from your portfolio, the amount you withdraw from your retirement fund each year should be more important than the rate of return you receive.

Diversification Is Key

Diversification is an important aspect of a successful retirement strategy. When you’re working, it’s common for people to have a fairly aggressive investment approach with 100% stocks as they’re accumulating assets and seeking more growth. But when you reach retirement, you shouldn’t keep the same investments you’ve had the last few decades. As we saw during the tech bubble in the early 2000s, the Great Recession in 2007-2009, and the first few months of COVID-19 in 2020, the stock market can drop 30% to 50%, and sometimes it can do that quickly.

What would your income in retirement look like if you were dependent on a portfolio that was 100% in stocks?

Situations like those are why we want to have diversification in your investment portfolio. We want to have other assets, besides stocks, that don’t fall nearly as much in a downturn, so that if you need income, we can generate it from those assets while we wait for your stock portfolio to recover.

In addition, this diversification can help level out the highs and lows of investment, hopefully giving you more confidence in your investment and income strategy.

The Emotional Element of Retirement Withdrawals vs. Contributions While Working

Accumulating assets for retirement is often driven by a sense of hope and optimism that you’re working toward a great goal and contributing to it every two weeks. But drawing down your accounts in retirement can often bring a completely different emotional experience with heightened anxiety and a fear of loss. In addition, any potential losses feel like a bigger deal, since this is the only pot of money you have, and you don’t want to be forced to go back to work because it’s fallen too much.

To help mitigate this emotional stress, it’s not only important to stay within a safe withdrawal rate range (which can be easier said than done); it’s also important to have the support of a good financial advisor who can provide the technical guidance you need, as well as emotional support and encouragement to stick with the plan. In collaboration with your financial advisor, you can make informed decisions during periods of market turbulence that will help you stay focused on your financial goals.

Find the Right Amount of Risk

Handling retirement withdrawals can be complicated, as it involves thinking about both technical and emotional aspects of your strategy. If you’re feeling confused or stressed about this process, or if you’re unsure about the level of risk you’re taking, our team at Comprehensive Advisor is here to assist you. Email us at or call (760) 813-2125 to see how we can support you toward a bright financial future.

About Our Advisors

Brett Gottlieb is the founder of Comprehensive Advisor and a financial advisor with nearly two decades of industry experience. He graduated from California State University-Chico with two bachelor’s degrees, in business administration and economics, and is Life Insurance licensed in several states. He is passionate about guiding his clients on retirement income planning, helping each client pursue their specific retirement goals, and defending the assets his clients have worked so hard to achieve. Brett is a California native and currently resides in San Elijo Hills with his beautiful wife and three children.

Our team of qualified professionals have experience in the financial service industry, and our advisors hail from some of the largest independent broker/dealers and banking institutions in the country. They have dedicated their professional careers to creating personalized financial solutions for individuals and families who seek successful retirement planning and currently offer investment advisory services through AE Wealth Management, LLC. Our advisors take a common-sense approach to the planning process and work with clients to create a retirement road map to help ensure their assets are protected and they receive the income needed to enjoy their future. Based in Carlsbad, California, they work with clients throughout San Diego County and beyond. Learn more by connecting with Brett on LinkedIn or email them at

Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor.  C.A. Financial & Insurance Services, CA Ins. Lic. #6000262. This material is intended to provide general information and is believed to be reliable, but accuracy and completeness cannot be guaranteed. Investing involves risk, including the potential loss of principal. Any references to protection benefits, safety, security, lifetime income, etc., generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. 1902610- 7/23.


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