In June 2008, the Dow Jones Industrial Average (DJIA) had fallen 20 percent from its October 11, 2007 high. LeVitre, a CFP licensee, mitigates such market volatility by establishing conservative withdrawal percentages and rates of return assumptions.
“We factor in a bear market right out of the gate because we’ve got money set aside in cash that isn’t going to be impacted by the stock or bond markets during the first two years,” said LeVitre, CEO of Net Worth Advisory Group.
The third key decision to make within the fresh new months of retirement involves determining when to tap into social security funds and what Medicare healthcare plan to enroll in.
Given that Social Security payments cannot begin until at least after 62 years old, the dangers of delaying Social Security and Medicare enrollment include the possibility that Congress will change guidelines for eligibility. “Some retirees are convinced this will happen and consequently start their benefits early to get it while they can,” said LeVitre. “Waiting to age 70 to collect Social Security distributions may cause a retiree to deplete their portfolio too quickly. Their expenses would have to be covered by their portfolio without the help of their Social Security benefit.”