economy, income, retirement, risk management

Being Too Fearful Can Hurt Financial Security

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”


― Charles Dickens, A Tale of Two Cities

I have seen many people who are enraptured by the market moves since the COVID recession of 2020. Markets supported by seemingly unlimited aid from central banks around the world, driving equities to higher all-time highs, and rewarding risk taking behavior.

I have seen many people in the past year who are fearful in the current market environment… High market valuation, trade war fears, warnings from pundits, Fed policy moves, volatility… Because of fear, many people have decided to sit in cash or even liquidate their retirement savings.

In a recent study the World Economic Forum examined the savings shortfall around the world… the situation where due to increasing longevity people are expected to outlive their savings. One of the key findings was the demonstration that Japanese savers are extremely conservative in their investing style, avoiding equities and only using cash and bond equivalents for saving. The result is Japanese women face a savings shortfall of 20 years compared to American women who have a savings shortfall of 10.9 years. A lack of growth in assets hurts financial security. (1)

Historically stocks and equities have outperformed cash and bonds as an investment vehicle.

The challenge for investors is to overcome the fear of potential loss and to stay invested. Fear is a very real issue in the current political and economic environment.

Based on these assumptions alone it is clear that as we approach retirement, we need to identify strategies that will help us manage these risks in retirement. How can we keep up with inflation, make sure we don’t outlive our money, and create a guaranteed income stream?

For savers and retirees, a solution to these issues may be annuities that provide guaranteed retirement income. These types of annuities create a lifetime guaranteed* income stream while giving the investor the ability to stay invested in the market. If the market declines, they will continue to get their stream of income.

By contrast, someone invested in the market without such guarantees, drawing income and experiencing a down draft in the market they may find themselves running out of money during retirement.

This fear, running out of money during retirement, is people’s number one fear according to several recent studies. (2)

If you want to create a secure retirement income while investing in the market, please reach out to me to discuss options that can help you protect your lifestyle regardless of what happens in life. I can be reached at james.cox@ffgadvisors.com

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To learn more contact:

James Cox

Cell: 267 323 6936

Email: james.cox@ffgadvisors.com

First Financial Group Advisors 744 W Lancaster Av Suite 235 Wayne, PA 19087

This material contains the current opinions of the author but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

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2021-125019 exp 8/23

  1. https://www.weforum.org/press/2019/06/retirees-worldwide-will-outlive-their-savings-by-a-decade-and-women-will-fare-worse/
  2. https://jamesacox.com/2020/09/03/how-to-set-up-guaranteed-retirement-income-2/