401k Diversification by Decumulation Period – Retirees

Dear Ruby,

Now that I have started retirement and I am taking regular withdrawals, I am finding it more and more difficult to get in touch with my broker for retirement advice and portfolio allocation. They seem to be very distant and I have not gotten a returned call or email in weeks. I am wondering how should I allocate my 401(k) but cannot get any response. What are some of my other options and how should I be approaching my portfolio while I am in the decumulation period? What else can I try?

– Confused Retiree

Dear Confused Retiree,

You are not alone in feeling this way now that you have started taking regular withdrawals from your retirement account(s). In fact, it is very common for brokers to become very distant during this phase in the process. As a current retiree, you are considered to be in the decumulation phase of retirement. Before you started taking regular withdrawals, you were in the accumulation phase because you were still putting money away for retirement and your account balance was continuing to increase. Now that you are in the decumulation phase, you are taking money out of your retirement account which means that your account balance is decreasing. This was ultimately the goal but it is not a part of the process that the broker benefits from.

How Decumulation Impacts Retirement Advice Portfolio Allocation

The decumulation phase is not a good one for a broker. Of course, they have spent a lot of time to get you to this point and have worked with you to increase your account balance over the years. During this time, you likely spent a lot of time with your broker discussing options, creating a game plan, planning for your retirement, etc. This was likely the main reason you started using their services in the first place but now, things have changed for your broker. What your broker may not have told you is that when you start taking out withdrawals on your retirement account, you also start becoming an account that is no longer as profitable for them. This is because they do not get as much from you in broker fees and their commissions are decreasing. while you still need help with retirement advice portfolio allocation, they do not make as much money helping you. This is a very common occurrence and if you speak to others who have recently retired, then you will see you are not alone in this change in amount of attention from your broker.

Considering Asset Allocation By Age

However, just because you are in the decumulation phase does not mean your work is done for your retirement account(s). Since your principal is going down, it is even more important for you to put a focus on your asset allocation and it can change depending on where you are in retirement. You still need to keep a close eye on your account balance at all times to ensure that it does not fall below a certain level based on your retirement age. Additionally, you should be taking a look at the asset allocation by age to make sure you stay on track. You do not want your principal to go down so far that you will not be able to rebound in the market at a later time.

How Should I Allocate My 401(k) in Retirement?

This can be very difficult without a responsive broker guiding you through the process and it is not something you want to leave to chance. if you cannot get your broker to assist you with the various aspects of retirement including your 401(k) allocation, you may want to consider exploring some other options that are available to you in the market. If you are not getting the help you need from your broker, it may be time to drop them and try something else such as the Ruby Tracker. This system will help you monitor your retirement accounts so you can enjoy more of your retirement the way you were meant to. Some of the benefits of the Ruby Tracker includes alert when your account balance falls below your set threshold, assisting with diversifying your portfolio, and much more.

You should never feel alone during retirement and while you worked very hard to get to this place in your life, you do not want to make any mistakes with your retirement account that could leave you in a bind later on. Find some tools that you can use to the fullest extent and secure your own future.

– Ruby