Dollar Cost Ravaging – Will You Run Out of Money During Retirement?
For those that don’t know me, my name is Dave Gilliland, and I am a Certified Specialist with The Corporation of Social Security Claiming Strategies. I am now in my 49th year in the insurance and financial industry. I’ve helped hundreds of clients maximize their retirement plans, and at the same time avoid market risk while still providing above average returns on their retirement savings. How do I do that? With a special investment plan that is linked to the stock market. Let’s be clear. Your returns are linked to market earnings, but your investment is not in the market subject to the ups and downs that the market has subjected investor to for years.
To say it another way”
“When the market goes up
We Credit you a gain
When the market does down
You remain the same”
In this article, we want to explore something called “Dollar Cost Ravaging.” What is Dollar Cost Ravaging? To understand this, you first must understand something called “Dollar Cost Averaging.” What’s the difference?
Dollar Cost Averaging says, while working and contributing to your retirement plan, it really doesn’t matter whether the market is up or down. Why? Because if the market is down, your new contributions will buy more shares. And when the market comes back up (and it always has) you should be ok.
Dollar Cost Ravaging, on the other hand, is quite different. Why? Because there are no new contributions being made into the plan and one needs to answer the question “how do you take money out of the stock market during retirement?“
The only way to take money out of an investment plan invested in the market is by selling “share.” See, regardless of how much your quarterly statement says you have in your account, it is a calculation based upon number of share you have multiplied by the “share price.” In actual dollars and cents, you have none and the money that you can ultimately receive from the plan is dependent on the price of the shares you hold at the time you sell those shares.
I have produced a video covering all of this as well as an alternative we refer to as an Offset/Index plan. In this video I show you how it is possible to run out of money 14 years into retirement if invested in the market, even though your shares were worth $1 Million at retirement. Additionally, we show you what “our plan” (offset/index plan) would look like during retirement.
In our illustrations, we show a 5% safe withdrawal rate on both the stock market plan and Offset/Index plan. While the stock market runs out of money in the 14th year in this hypothetical illustration, the offset/index plan not only continues to have money in the plan all year but we show you how it can provide nearly 400% when you add the cumulative withdrawals while living and the Enhanced Death Benefit paid to a named beneficiary. This assumes that the retiree lives to age 85, 20 years into retirement. If death occurred before 20 years, these numbers would be less. Even so, say the retiree only lived 10 years into retirement the numbers would still add up to 266% in this illustration.
My suggestion? Watch the video for more information and then contact me with your questions so that we can provide a customized illustration that will provide you with all the details. There is, of course, no cost or obligation on your part. But we know you will like what you see.
You can view this video on my website at: https://gorillaretirement.com/homepage/dollar-cost-ragaging
