Rebecca Katz: What kind of changes would you envision for the average retiree?” So is there something they should be doing differently?

Maria Bruno: Couple things that I would say is, one, make sure that you have liquidity. You know, usually when we talk about liquidity for individuals who are working, it might be on the lower end. Maybe two weeks or a half a month worth of spending in cash reserves for spending type shocks. If you’re a retiree, it may make sense to have a little bit more of a buffer. Up to two years is probably reasonable. Anything more than that is a risk because you’re not invested in the market. Make sure you have that liquidity buffer as a spending account to make sure that you can meet your spending needs.

Check your asset allocation. If you’re someone who is entering retirement, you should be planning for a 30 plus year retirement, so equities do a play a role. A diversified balanced portfolio is prudent.

And the other thing I would say is check your spending patterns. The first place would be to look at discretionary spending. These are things like travel and leisure. I will say that given what’s going on right now, that’s taken care of itself, right. Yes, because of the stay-at-home mandates, you know, many of us are cutting back on our discretionary spending.

Nondiscretionary spending, on the other hand, are things that maybe you can look at tighten the belt a bit, but you want to be thoughtful in terms of where can you cut back.

So many retirees have been doing this. When you look at the markets when the markets were up, many of them would not spend everything but reinvest in the portfolio, and that’s great because then that gives you a buffer in situations like this where the portfolios might be going through some volatile times. So basically have some type of dynamic spending policy where you can tap when the markets are up, but it gives you a little bit more of a floor when the markets are down. So those are a couple of the things that I would reinforce with someone who’s either entering retirement or just gauging this through retirement.


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