After experiencing my first hurricane (and coming out unscathed – thank you, God), I realized how important it is to prepare well for the unknown. While we knew about Irma coming toward us for quite some time, not knowing exactly where or how hard it would hit was nerve-wracking.
To prepare for Irma, I asked the experts – those who have experienced hurricanes. I purchased water, bought non-perishables, got cash, filled up my car with gas, ensured my dog had enough food and put up the shutters. Now it was time to wait. While Irma didn’t impact us due to heading west, do I feel that the preparation was a waste of time and money? Do I regret having cans of soup that I may not open for months? Not at all, because even though the worst didn’t happen, I was prepared for it if it did.
I advise my clients and prospects to prepare for retirement, expect the unexpected, be ready for the worst, and ensure that you have a stockpile of “non-perishables.” What do I mean by non-perishables when it comes to retirement planning? I refer to ensuring that you have in your plan money that is protected and can’t go “bad.” I am speaking about money saved against a stock market crash storm. Cash is guaranteed to be there when you need it the most.
Many people will tell you not to worry about the market because it always “bounces back.” But, when it is your hard-earned money, and you no longer have the ability or the time to “rebuild,” it becomes worrisome. Think about not having insurance on your home because you believe that in the last ten years, no hurricane has hit your area, and you don’t think it ever will. What happens if a storm comes along and destroys your house and you have no insurance to rebuild? Suddenly, your plans have been destroyed or, at the least, take a significant direction you were unprepared for.
Therefore, I advise my clients at or near retirement age to take a portion of their portfolio and place it in a product that can provide them the insurance and peace of mind that their entire financial house isn’t destroyed when the unexpected happens.