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Giesting Financial’s Colt Ryan recently appeared on Retirement News Online, a Scottsdale-based outlet providing the latest news and updates for pre-retirees and retirees. As retirement can come with many questions, Colt discussed the risks and how he goes about mitigating them for his clients.

Colt first touched on diversification within a portfolio and how it’s a strategy he uses to help those looking for ways to address multiple different risks. He said:

I think diversification is the biggest key to success when talking about investments. You want to make sure your portfolio is diverse, not just with stocks and bonds, but also with different investment and insurance products that can help alleviate risk. Ultimately, as you get closer to retirement, you don’t want to have that major downfall that can come with being too invested in one asset or asset class.

Diversification of your portfolio is one of the most important aspects we take into account when creating your unique financial plan. While it used to be about the proper distribution of stocks and bonds, with stocks intended to provide growth and bonds intended to provide more certainty, we can now introduce new, alternative asset classes should they fit your goals and circumstances. We aim to find the uniquely designed portfolio that works for your needs, no matter what those may be.

He then discussed how he can help a client and their portfolio adapt as they near retirement. Colt said:

Our main focus at Giesting Financial is the customization of your portfolio. Everyone has a different situation, so we work with you to find the distribution of assets that fits your goals. The general rule of thumb, however, is that as you get closer to retirement, we want to have less risk as to mitigate sequence of returns risk, which is the risk of market decline early in retirement when your account balances are at their peak, meaning that losses are taken on the greatest sums of money. The market doesn’t always rise steadily at 5% to 7% per year. It could go down 20%, so we want to stay away from those big drawdown years that could be detrimental to your portfolio and your future.

Though each client is different with different needs and unique goals, in general, it can be a good idea to take on less risk in your portfolio as you near or enter retirement. The main reason is sequence of returns risk, which is when you face severe market decline in the early years of retirement. While growth may average out to the same total no matter when your portfolio experiences gains and losses, taking the losses are larger quantities can be extremely dangerous, potentially even causing you to run out of money while still alive. We aim to mitigate that risk with solutions and asset distributions that work to protect your money while possibly still allowing you to experience growth.

Finally, Colt was asked about the main risks in retirement and how they might affect a retiree as they progress through the decumulation phase of their investing life cycle. He responded:

In my opinion, the biggest risk in retirement is taxes. We don’t know what tax rates will be in the future, and owing money to the government could eat away at your portfolio. Inflation is yet another risk that we’re currently experiencing the effects of. That’s when the purchasing power of the dollar goes down, and you’re forced to use more of your money to buy the same goods you rely on. Healthcare is another big one. We’re starting to see it pop up more and more as nursing home and healthcare costs go up. Your customized retirement plan should address all of those unique issues in a way that specifically caters to your needs.

In addition to sequence of returns risk, taxes, inflation and healthcare are all major risks in retirement. Furthermore, they all contribute to the overarching concept of longevity risk, which is the chance that you’ll run out of money while still alive. While we can’t predict tax rates, inflation rates or healthcare costs, we can work to mitigate the effects that come with them by introducing investment and insurance products designed to fight them. The best way to find out how Giesting Financial may be able to help you protect your hard-earned assets is by scheduling an appointment to give us a better idea of your circumstances and objectives. If you’re ready to meet with us in our office, you can click right here!

To watch the entire video featuring Colt Ryan on Retirement News Online, click here.

If you’re ready to take the next step with us, please give us a call. You can reach Giesting Financial in Batesville, Indiana, at 812.933.1791 or in Columbus, Indiana, at 812.565.2726.


This article is for informational purposes only and not to be construed as financial or investing advice, nor is it a replacement for real-life advice based on your unique situation.

Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite #150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). Securities are offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. PCIA and Private Client Services are separate entities and are not affiliated.