There is a retirement income “rule of thumb” that states that once you retire you can basically invest in the market and pull 4% a year, adjust it for inflation every year and you will never run out of money.
Sounds good right? We just buy Amazon, Tesla, Apple and other stocks with pretty proven track records of growth. Here’s the problem. Stock market movement is based on things we can’t realistically control especially in the short-term. When we invest in the stock market, we are investing on what the future of those stocks is going to be and the future of stocks have always been great.
However, short-term not too much. Investing in the stock market may create a problem for retirees who need income. A market downturn will cause havoc and possibly destroy your future retirement. Make sure that you have an income plan that is not totally dependent on the stock market.
Make sure to check out my blog on How Do Stocks Work here.