top of page

Which Investment Strategy Should I Implement Pre & Post Retirement? by Michele Nami-von Hoven, RICP, RFC, IAR,NP

Which Investment Strategy Pre & Post Retirement Makes the Most Sense?


Be Fit Financially (BFF) emphasizes the fundamental values of clarity, integrity and real results.   The Proprietary BFF Ultimate System is designed to obtain  Financial Security, Savvy & Significance to and throughout Retirement with Peace of Mind.
Be Fit Financially (BFF) emphasizes the fundamental values of clarity, integrity and real results. The Proprietary BFF Ultimate System is designed to obtain Financial Security, Savvy & Significance to and throughout Retirement with Peace of Mind.

Pre-Retirement Years Are Crucial Yet Risky Period for Saving. People typically accumulate much of their retirement savings in the decade or so before they stop working. Most people cannot afford to devote many resources to retirement savings at younger ages, when they are raising their families and putting their children through school. Once they have reached their late 50s, many people have completed their child rearing responsibilities and are earning higher salaries than they did at younger ages, leaving them with more funds to invest in 401(k) plans, IRAs, and other retirement savings vehicles.


The value of future retirement benefits paid to workers in traditional employer pension plans also tends to grow rapidly for those in their 50s, because benefits are typically tied to years of service and salary earned near the end of the career. Further, working late into one’s 50s generally maximizes future Social Security benefits, which are based on earnings received in the 35 highest-earning years.



How Do I Know Which Investment Strategy Makes the Most Sense for Me?

There are many factors that affect choosing an investment strategy. The first set of factors begins with you. What are your Values Based Goals (VBG's)? A disciplined process is key to understanding the right investment strategy for your specific situation, your money mission. Once you understand your Money Mission, then begin to think about the second category of factors which involve the overall health of the economy.


Here are common questions to walk you through the investment planning process:


  • What is the goal of the funds? Are they to be used now, at some point in the future, or are they funds you would like to leave as a legacy?

  • What are the expectations you have for these funds when it comes to risk and reward?

  • What part of your portfolio do the funds you are investing represent?

  • What percentage do they represent in your liquid portfolio and overall portfolio? (Your total assets)

  • Are the funds qualified for tax deferral (Meaning part of a retirement plan or IRA) ?

  • What is your confidence level with investing, or how much investment expertise do you have?


The initial Money Mission process has to be thorough, which is why Fiduciary financial advisors will include financial planning, not just investment management, as part of the services provided to their clients.

We believe all of our clients should have a holistic financial plan, which is why we view it as the foundation of the process.

Once you know your Money Mission and walk through the basics, decide whether you need to create the asset allocation plan or simply find the spot in which the funds we are going to invest fit within an already established plan.


To determine the path ask yourself:


  • What is the current state of the domestic and global economy?

  • What is the state of the local economy?

  • Where are we in the business cycle?

  • How are certain industries and sectors performing relative to each other?

  • What is our team’s overall expectation of the market?


By combining your values factors and economic factors, we are very comfortable to make the asset allocation decisions. This is when we determine the answer to one very important question: Do I need to make an allocation to irreplaceable capital (Foundational money for your needs and perhaps wants) ?


Irreplaceable capital is the amount of money we must protect from a downturn in the market. This is different than not wanting to lose money; no one likes to lose any money. And while that seems obvious, there are reasons why some may overreact to investment losses.


  • Emotionally, we all feel losses more than wins.

  • No. 1 is not only an emotional response but also a logical response. If you lose 20% of $1 million, or $200,000, you will have $800,000. If you only earn a 20% return on the $800,000, you will have $960,000! So you need a 25% return on your money to get back to the original investment. You need more money to get back to where you started. Feel that discomfort?


Irreplaceable capital is money that must be preserved as much as possible because if it’s not, you may suffer a major change in lifestyle, which could even change the entire financial plan.

Once we have made a choice on irreplaceable capital, we then need to go back to our client factors. Do you need the income from the portfolio in the near future? If so, then we will choose a strategy which provides income. We may choose a combination of the tried and true dividend paying stocks, some capital appreciation and bonds. We may also incorporate more advanced investment strategies that require very experienced management and trading. Some clients may choose an allocation of growth and alternative investments because of the potential for return and diversification.


These two allocations may be a smaller part of the portfolio or a larger part, this all depends on timing. We may view domestic investments as more or less risky, and we may use global investment strategies to ensure we have diversified investments in the portfolio. The key here is to educate and prepare clients regarding the added risk. Time plays a critical role in developing strategies for retirement. During retirement planning sessions, you may be in the first stage of accumulation and have recently began to save and invest. In this situation, we may start with a more growth oriented strategy approach. However, this all depends on the answers to the initial client questions. Just because you recently started investing or you are a younger person, it doesn’t mean we automatically put you in a growth strategy and send you on your way.


Approaching Retirement


Are you actively visiting your portfolio or leaving it to chance?


If you are approaching retirement age, we may choose to sell growth investments. Let’s pretend we have a couple of great years in the market, we may save two years’ worth of funds needed to cover fixed living expenses and move them into an irreplaceable capital strategy to preserve your wealth in case there’s a market downturn the year you retire. It will allow us to preserve a cushion of time in which we don’t have to sell other shares at a lower price point.


When it comes to strategy selection, it is important to keep in mind the two categories in building a disciplined investment process. Combining investment management and financial planning provides us with guidance to create the right roadmap. We must focus on both the client category factors as well as the economic factors and work with each in tandem to create the best investment strategy for you.


Get Your Assets Together Because Retirement Isn't Cheap!

For a 30 Minute Savvy Conversation Contact: Michele@BeFitFinancially.com




This content is for general information only and is not intended to provide specific advice, an endorsement or recommendations for any individual. No strategy assures success or protects against loss. To determine what is appropriate for you, consult with an advisor. Alternative investments can be volatile and you should be aware that you may lose all or a portion of your investment. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards. A diversified portfolio does not assure a profit or protect against loss in a declining market. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.





Comments


Featured Posts
Recent Posts
Archive
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

3500 N. Causeway Boulevard

Suite 160

Metairie, LA  USA 70002

 

504-957-2222

504-401-0179

​

Michele

@BeFitFinancially.com

3500 N. Causeway Boulevard

Suite 160

Metairie, LA  USA 70002

 

504-957-2222

504-401-0179

​

Michele @BeFitFinancially.com

© 2025 BeFitFinancially,LLC

bottom of page