Greenbook: A Local Guide to Chesapeake Living - Issue 3 | Page 23

MOST PEOPLE DON’T
KNOW THAT 80 PERCENT
OF MOUNTAIN CLIMBING
ACCIDENTS DON’T OCCUR
ON THE WAY TO THE SUMMIT
THEY HAPPEN ON THE WAY
DOWN, SAYS FINANCIAL
EXPERT AND EXTREME
SPORTS ENTHUSIAST
DAVID ROSELL.

retirement savings. That’s on top
of the 3.5 million baby boomers who
have been retiring each year, and
will continue to do so for more than
a decade.

Although arriving at the top of the
mountain is considered by many
mountaineers to be one of life’s
greatest accomplishments, I can
tell you firsthand that summiting
is not the ultimate goal for climbers,”
says Rosell, CEO of Rosell Wealth
Management and author of
“Failure is NOT an Option,”
(www.DavidRosell.com).

• Inflation: During the second half
of your financial journey, it’s critical
that you’re able to maintain your
purchasing power. Inflation simply
means that every year your money
buys a little – or a lot – less than it
did the year before. Currently,
inflation is 3.5 percent, which doesn’t
sound like much. However, even if
the rate holds steady and doesn’t
increase, prices will have doubled in
20 years.

“They know that most climbing
accidents and deaths occur on the
descent. With this in mind, they
will tell you that their objective is to
reach the summit and get back down
alive to see their family and friends.
They understand that the second
half of their journey presents the
greatest risk and requires the most
planning.”
“Likewise, we need to think of
retirement as the descent from the
financial mountain, which can be
treacherous.”
Retirees and pre-retirees need to
evolve from the traditional view of
retirement, especially with so much
legitimate concern about an
unprecedented retirement crisis on
our immediate horizon, he says.
According to a 2013 report by the
National Institute on Retirement
Security, 45 percent of working-age
American households have no

To help his clients thrive while
experiencing descending their own
financial mountains, Rosell briefly
touches upon five major financial
risks many experience during
retirement.

• Longevity: According to U.S.
Census Bureau figures, the over-80
population is increasing five times
faster than the overall population.
By 2030, the demographics of 32
states will resemble those of Florida
today. With more golden years to
play, you’ll want the funding to
make them fun! “Today,” Rosell
says, “going gray means time to
play.”
• Health/long-term care: Sadly,
the escalating costs associated with
long-term care during retirement can
make the possibility of outliving one’s
retirement income a reality for many.
Statistics reveal that as we age,
there’s an increased probability of
our eventually needing assistance
with basic daily activities. The truth
is that most of us will need long-term
care in our later years.

• Market risk: Economic recessions
have occurred throughout the
history of modern economics and
always will, averaging one almost
every nine years. If the market
loses 50 percent one year and then
increases 50 percent the following
year, where are you? Many people
get this wrong; after the fall and
subsequent rise of 50 percent, you
will have lost 25 percent. "This
happened twice in the last decade,"
Rosell says.
• The sequence of returns: Gains
or losses, or the order in which you
receive your returns, can have a
major impact on your retirement
portfolio. It can mean the difference
between having enough income in
retirement and running out of money
too soon. Be careful when an analysis
states that you should achieve your
goals by obtaining a specific rate of
return. In most cases, this statement
has not accounted for the sequence
of returns.
“These are by no means the only
tricky slopes that may have an
affect on your retirement,” Rosell
says. “Just as you have worked a
lifetime to have money for your
golden years, now is the time to
manage your wealth wisely."
Reprinted with permission from
RISMedia. ©2014. All rights reserved.

GREENBOOK | SEPTEMBER - OCTOBER 2014

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