First Quarter, 2025
The Older We Get…
The older we get, hopefully, the wiser we become. And, unless we discover the fountain of youth, the less time we have left to make up for large investment losses. Readers of my quarterly client letters have heard these “words of wisdom” from me before. But as my mom used to tell me, there is no time like the present.
Here is a chart generated by ChatGPT to illustrate the annual values of a theoretical $500,000 portfolio invested in the S&P 500 starting on December 31, 1999, and assuming annual inflation-adjusted 5% withdrawals of $25,000. Bottom line: A 60-year-old would have run out of money at age 77.
As you can see from the above chart, it becomes increasingly important that we, as wealth strategists and clients, be proactive in taking steps to preserve our wealth, especially as we age and begin taking withdrawals. For most of you reading this, we’ve had this discussion recently and proactively made the appropriate adjustments. However, if worries persist, please let your wealth strategist know.
As we get older, allocating more to the shock absorbers of fixed income and cash, and less exposure to the short-term volatility of the stock market, becomes more important than taking a chance on how long it will take to recover the next time the stock market experiences turbulence. Put on your seatbelt and oxygen mask before turbulence occurs.
-Phyllis
The data herein was obtained using Artificial Intelligence (AI) tools such as ChatGPT to enhance the quality of the foregoing materials. While AI is designed to provide reliable insights, it is subject to limitations as it relies on algorithms and historical data, which may not account for unexpected events, changes in behavior, or new regulatory requirements. All outputs are reviewed by professionals to ensure accuracy and reliability and to ensure alignment with client goals.
The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable. However, Waddell & Associates cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Waddell & Associates does not provide tax or legal advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always, please remember investing involves risk and possible loss of principal capital and past performance does not guarantee future results.
