If You Insure Your Home, Why Aren't You Insuring Your Retirement?

What is the probability that your house will burn to the ground in the next ten years?

Most people would probably answer, "Very low."

And they'd be right.

Now let me ask a different question.

What is the probability that the stock market experiences a significant decline sometime during the next ten years?

The answer?

Very high.

History suggests there's an extremely good chance the market will experience at least one correction of 20% or more over a ten-year period. In fact, market declines of that magnitude have occurred roughly every five years throughout modern market history.

So here's something worth thinking about.

We willingly spend thousands of dollars every year protecting our homes against an event that is relatively unlikely to happen.

Yet many investors do absolutely nothing to prepare for a market decline that history suggests is very likely to happen.

That doesn't seem to make much sense.

The Difference Between Insurance and Investing

Before anyone misunderstands the point, I'm not suggesting you should cancel your homeowners insurance.

Quite the opposite.

You should absolutely protect your home.

But why do we so readily insure one of our most valuable assets while leaving another one almost completely exposed?

For many retirees, their investment portfolio is worth far more than their home.

And unlike a house fire, which may never happen, a major market decline almost certainly will happen eventually.

The only uncertainty is when.

The Real Risk Isn't the Crash

Here's what many people miss.

The biggest danger isn't that the market falls.

Markets have always recovered.

The danger is what happens if the decline occurs at the wrong time.

If you're 35 years old and still saving for retirement, a bear market can actually be an opportunity.

If you're 67 years old and withdrawing income every month, that same bear market can permanently damage your retirement plan.

This is known as sequence-of-returns risk.

When you're forced to sell investments after they've declined, you lock in losses and have fewer dollars left to participate in the recovery.

That's why two retirees with identical portfolios can have dramatically different outcomes depending on when the market declines occur.

We Protect Everything Else

Think about all the things we insure:

• Our homes

• Our cars

• Our health

• Our lives

• Our businesses

  
  

Why?

Because the consequences of a major loss could be devastating.

So why would we leave our retirement portfolio—often our largest financial asset—without any strategy to help manage major market downturns?

Protection Doesn't Mean Giving Up Growth

One of the biggest misconceptions I hear is:

"If I reduce my market risk, I'm giving up growth."

Not necessarily.

In fact, many retirees benefit by assigning different jobs to different dollars.

Some dollars are designated to provide dependable income.

Some are designed to provide stability and help reduce the impact of market volatility.

Others remain invested for long-term growth because they may not be needed for years.

That's the foundation of Purpose-Based Retirement Planning™.

Instead of asking every dollar to do everything, you assign every dollar a purpose.

Ironically, protecting part of your portfolio often allows the rest of your portfolio to stay invested longer, because you're no longer depending on it to fund your next monthly paycheck.

The Better Question

Instead of asking:

"How much money can I make?"

Ask:

"How much of my retirement can I afford to lose if the next bear market arrives sooner than expected?"

Because history doesn't leave much room for debate.

A significant market decline isn't a possibility.

Over a long enough timeline, it's an expectation.

The question isn't whether you'll experience one.

The question is whether you'll be prepared when it arrives.

Ready for a Second Opinion?

If you're approaching retirement or already retired, now may be a good time to ask a different question:

Does every dollar in my retirement portfolio have a purpose?

I'd be happy to show you how Purpose-Based Retirement Planning™ helps many retirees build a strategy that balances growth, stability, and income—without relying on hope that the next bear market waits until after they're gone.

Christopher Krolak Financial Advisor | JChristopher Group📞 (585) 490-1969

🌐 www.j-chris.com

"A Simpler Way to Feel Prepared."