Broker Check

Rich and Rosie Red Zone

December 16, 2020

Last week I introduced you Marty and Mary Midlife.  This week it’s time to check in on the next big stage in the financial planning cycle.

Meet Rich and Rosie Red Zone. 

Yes, just as the term “red zone” is used in football, I use the same analogy when it comes to dialing in your retirement plan.  Now, if you’re as terrible in the Red Zone as Doug Pederson, Carson Wentz and the rest of the Philadelphia Eagles, your retirement may be off to a very rocky start.  But if you work with a good financial planner, and not someone as incompetent as the Eagles GM, Howie Roseman, you will be in good shape (Sorry had to get that Eagles tangent off my chest!).

Getting introduced to a new client looking towards retirement is always an interesting challenge.  When I use the term Red Zone, I’m referring to the 10 years prior to your retirement goal year.  While 10 years is not a hard and fast rule, it does give us time to adjust your plan and get you on track for the goals we have set.  Often though, I’m referred to a client who may be retiring the next week.  I’ve also been introduced to people who thought they could handle all the retirement planning on their own.  Once they were in retirement, however, they found themselves watching CNBC on a daily basis and allowing fear to set in.  It made them realize that maybe they could use some help and advice after all. 

While I always believe the earlier you can plan for a goal the better, in all the situations noted above, adding a planner and another set of eyes can be extremely beneficial.  In the case of the Red Zone’s, they were at a party with a client of mine and brought up some concerns they had as they were preparing for retirement.  Are we going to run out of money?  How much will taxes be impacting my income and what happens if taxes go up?  What is the cost of health care going to be in my retirement and how can I plan for it?  These are great questions and things that we can strategize for. My clients mentioned that they had recently had a review meeting with Birds Eye and that we had been working together for the last 5 years including the original design and implementation of their retirement plan.

When I get a chance to meet the Red Zone’s I’ll let them know the concerns they have are common but extremely valid.  There are also other challenges facing retirees these days that no other generation has had to deal with.  First and foremost, with interest rates at all time low’s, and the Fed indicating they will stay that way for the near future, many retirees are forced to take more risk to find yield and return.  As an example, at the beginning of 2000 the yield on the 10-year US treasury was 6.52%, today it sits below 1%.  Here are a few others issues we routinely see and discuss:

  • The cost of Long Term Care and the various options
  • When to take social security
  • Outdated estate planning documents
  • Potential changes in the Federal estate tax laws
  • Sequence of return risk

Highlighting these issues once I get a chance to meet the Red Zone’s is not intended to scare them.  In fact, I believe the opposite to be true.  The more potential issues you can foresee, discuss, and provide solutions for, the more comfortable and confident you will be in your retirement. 

There are many strategies we have implemented to help new retirees like the Red Zone’s:

  • There have been many positive changes in the Long Term Care market by the insurance companies that can help protect your overall retirement plan.
  • You can attempt to mitigate sequence of return risk and overall market risk through your investment allocation and withdrawal strategy. Since the credit markets are typically forcing retirees to own more equities than they have in the past, having the proper allocations is critical.
  • We have built numerous relationships with estate planning attorneys throughout the Tri-state area to help ensure you have another trusted advisor to handle the issues and questions that are unique to your financial plan
  • By working together on an overall strategy, it allows us to better understand when we should begin your social security distributions to maximize those benefits.


I’m looking forward to working with the Red Zone’s to help get them started on a long and happy retirement.  As always, it’s the highest compliment that I was introduced to them through an existing client.  Most importantly, as I have mentioned with people at all stages in the financial planning process, the initial plan is only step one.  A true financial planner is one that will be with you along the journey.  Life will always throw errant passes at your plan like Carson Wentz trying to throw a screen pass.  Have a good planner by your side to help you adjust.  Feel free to share this with anyone you may know facing these questions!