By Debbie Gardner
Charlie Epstein founded Epstein Financial Services in Holyoke, MA., in 1981 and has spent the past 40 years teaching corporations, fellow financial advisors - and his many clients - how to navigate the financial world to prepare for the retirement they and their clients desire. Known as “The 401k Coach,” Epstein’s commitment to his clients and their financial success, as well as to his industry, has resulted in him being recognized nationally as one of the industry’s most influential individuals.
Epstein, who relocated his business to expanded offices in East Longmeadow in 2018, is also the author of two books: “Paychecks for Life” and “Save America, Save!”
Well aware of the economic and financial uncertainties precipitated by the coronavirus pandemic - and their potential effects on our readers - Prime reached out to Epstein for some thoughs on how retirees and pre-retirees should approach this uncertain landscape in the months and years ahead.
Here’s what he shared with us:
Q: COVID-19 has caused layoffs and terminations for pre-retirees, and market swings affecting income streams for those already retired. What are some smart first steps to cope with these financial challenges?
“I strongly suggest meeting with a competent financial advisor to run a comprehensive cash flow analysis for pre-retires who have faced early layoff or find their income affected by market streams, to determine where they may be able to reduce expenses and reposition investments.
“As ‘cash is king’ - right now, I would recommend renegotiating all loans - home, auto etc. Many banks will allow individuals to postpone payments six to 12 months which would free up income to meet other obligations or living expenses.”
Q: Are there financial instruments that might offer better protection for those looking to extend retirement income streams during the economic recovery? Is this even the time to make any moves?
“Guaranteed income and principal protection against market volatility is at a ‘premium’ right now. I would strongly recommend any pre-retirees (age 50 or older) and retires research guaranteed income products - i.e. annuities - as an alternative to meet their long-term income needs.
“I would suggest considering re-allocating a significant portion of an individuals bond portfolio with these guaranteed products. Interest rates will remain low for many years and when they do rise, a bond investor will experience automatic negative returns.
“A variable annuity with a guaranteed income rider or an indexed annuity with similar features, may provide more income and upside potential in the long-run. Careful consideration should be given to insurance carrier ratings, fees and how these products are designed to meet both short and long-term income needs..”
Q: Looking to the future, are there any proactive steps individuals might consider taking now to better weather economic upheavals that may occur in the coming years?
“ I believe the markets will continue to be volatile over the next three years as we grow our way out of this pandemic and recovery.
“I suggest to all retired clients that they have a minimum of two to three years of their annual expenses in cash or cash equivalents. This way they can leave their remaining investment in long-term growth strategies. ”
