There’s been a lot of talk recently about rising interest rates, inflation, and what all of this means for the bond portion of your investment portfolio.
So today, I’ve invited Tim Tenbrink, CFP®, back to the show to talk about retirement planning, investment management, and, specifically, the role bonds can play in a well-diversified retirement portfolio.
We’ll talk about bond quality, duration, the relationship between interest rates and bond prices, and give you a few things to consider as you prepare to invest for what we hope will be a long retirement.
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Transcript:
479 Why Bonds Still Matter in Retirement
Announcer: Welcome back, America, to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now, here is your host, Jason Parker
Jason Parker: America, welcome back to another round of Sound Retirement Radio.
You’re listening to episode number 479. The title is Why Bonds Still Matter in Retirement. There’s been a lot of talk recently about rising interest rates, inflation, and what all of this means for the bond portion of your investment portfolio. So today, I invited Tim Tenbrink, certified financial planner, back onto the show to talk about retirement planning, investment management, and specifically the role bonds can play in a well-diversified retirement portfolio.
We’re gonna talk about bond quality, duration, the relationship between interest rates and bond prices, and give you a few things to consider as you prepare to invest for what we hope is gonna be a really long retirement. But before we get started, I like to start the day by renewing our minds, and the verse that stood out to me this week comes from Acts 2:28.
“You have made known to me the paths of life; you will fill me with joy in your presence.” And now something fun to share with your family. How do cows pay for things? With moo-lah. If you really wanna bug ’em, you really wanna drive ’em crazy. Moo. I can’t. Uh, what did the dollar say to the quarter? “You don’t make much sense.”
If they roll their eyes, mission accomplished. Without any further ado, here is my conversation with Tim Tenbrink. It’s my good fortune to have Tim Tenbrink back on the program. Tim, welcome back to Sound Retirement Radio.
Tim Tenbrink: Thanks, Jason. Good to be back with you.
Jason Parker: You know, I’m excited about this topic. We’re gonna talk about bonds specifically.
They’ve been in the headlines with the Federal Reserve recently raising interest rates, and it’s an area that I find a lot of people really don’t understand. They know that bonds create that safety, that cushion within their portfolio, but I thought we should have a stronger, um, a more thorough conversation about this topic specifically because we’re coming up at the end of the year.
This is a good time for people to do an analysis and really think through how are they investing, why they- are they investing the way that they do. But one of the things I really wanna emphasize before we get into this discussion about bonds is I’ve, over the years I’ve met with a lot of people, and a lot of times people will come in, they’ll say, “Jason, we have a financial advisor,” and we’ll start talking about their plan and I’ll, and I’ll ask them questions specifically about the plan, and instead of showing me anything plan-related, they show me investment strategy.
They show me their investment portfolio. They show me the statements that they have from their broker. I just think it’s so important to emphasize, and a lot of people really don’t understand this. They think, “Well, I’m working with a financial advisor. I must have a financial plan, and that plan is represented in this investment strategy.”
But Tim, what about you? Do you see that at all where people confuse the two, planning and investment strategy?
Tim Tenbrink: Yeah, absolutely. The, the, the tendency is to just focus right on the investments. One of the things that’s just different about the work we do is that we wanna have a plan first and then make decisions on the investments because that way we can make informed decisions.
If we have no idea what your cash flow needs are gonna be, we have no idea the time horizon, um, there’s big questions we’ve gotta answer before we say, “Okay, how are we gonna allocate specifically the funds? How are we gonna, um, manage risk from that time segment standpoint?” Which we just don’t have the data to do if we haven’t developed a full plan.
And so it’s important to get step one. I like to explain it to people when I first meet with them as a marriage. You know, one side is the financial planning piece, and that’s where we’re looking at everything, um, really nailing down the cash flow needs, when you’re gonna kick in income like Social Security, so that way we can just understand what dollars need to be available when.
And then on the other side of that marriage is the investment strategy. And, and both are crucial so that you can have a successful retirement. Just having good investments, but then spending more money in taxes or not optimizing the other areas isn’t gonna serve you well. And so I like to just explain that marriage of both of those working together.
Yeah. And that is step number one.
Jason Parker: Absolutely. The other thing I think is really important, and it’s a- it gives us a unique view into the world of investing and financial planning, is that most of the people that we serve are, uh, within five years of retirement, they’re just about to retire, or they’ve recently retired.
And so when you’re thinking about portfolio construction at this new phase of life, your money’s gonna h- it has to work different than it did during your accumulation years. I mean, it just makes sense. You don’t wanna be taking the same types of risks with your money in retirement th- as you did when you were working.
Because frankly, if you’re working and the market drops 20, 30, 40%, it doesn’t really matter because you’ve got a job and you’ve got income, and you’re like, “Oh, I’ve been through this before. Just invest more.” But all of a sudden, when you get to a phase of life where now this money really is important because risk becomes real.
Once you’ve retired, what you have is what you have, and you can’t be in a situation where you’re taking a lot of risk. So thinking differently about your portfolio as you enter a new phase of life is normal, it’s healthy, it’s wise, and to make sure that that investment strategy matches up with the financial plan is really, really important, that you don’t just have an investment strategy, that you have a plan.
When we talk about risk, Tim, this is another area I see people make mistakes ’cause we’re always talking about retirement’s all about cash flow. It’s all about making sure you have enough income coming in to cover your expenses. And that’s… When we talk about bonds, that’s what bonds do, is they produce income for people.
So one thing that I’ve seen people do is they say, “Well, if, if income is where it’s at, let’s go buy the highest yielding income that we can get from bonds.” Do you wanna take a minute and just talk about the risks associated with high yield?
Tim Tenbrink: Yeah, and what are referred to as junk bonds, you know, in the, in the industry.
You know, does- the, the whole idea you have to question, what are we trying to accomplish with bonds? And you’ll talk more about this, the strategies that we’re building when we’re incorporating bonds, it is to have high-quality fixed income because as folks shift from accumulation phase to decumulation rais- phase, our whole purpose of in- investment purpose changes.
The priority changes. It goes from, um, maximum capital growth when you’re young and you’re working, you have a long time horizon, to now we’re trying to manage the sequence of returns risk. We’re trying to have secure, predictable income. So if the goal is secure, predictable income, then incorporating junk bonds or high-risk, high-interest yielding income sources isn’t helping us accomplish that.
And, um, and, and that’s where, you know, you can talk a little bit more the specific asset allocation. It is built with that intention of it doesn’t help us accomplish the purpose if we say, “Okay, yeah, there’s high yield here,” but we’re still taking risk. If that’s the case, we might as well be in, in equities that are gonna have over time a better yield anyway.
But what we’re really looking for is that consistent, consis- secure income that our retirees are gonna need.
Jason Parker: Yeah. And it’s the ballast, right? It’s the, the bonds are the- at this phase of life, they shouldn’t be the growth engine in the portfolio. The bonds or the fixed income should be the stability, the stabilizing factor because we know that stocks don’t just always go up forever.
There’s gonna be a pullback, and when there is, we have the bonds in the portfolio to help, uh, buffer that. They produce income, and they’re not as volatile. And you don’t want really volatile bonds in your portfolio. And I guess one of the reasons this comes up is I, again, I just have seen people very recently where I’ve been meeting with them, high yield equals high risk.
So we can look at the bonds you have, and yeah, you might be getting high income, or maybe they’re not even bonds. There’s a lot of different alternative, uh, tools out there today that produce cash flow for people. But just remember, the higher the income coming off of those alternative tools, the more risk you’re taking.
And the question you have to ask yourself is, at this phase of life, now that you’re retired or getting ready to retire, do you really want high risk as a part of your portfolio when it should be something that, that’s really designed to stabilize? One of the things I wanna encourage people to do, Tim, as we have this conversation, a, a lot of people, they don’t spend all of their time managing investments or looking at mutual funds and ETFs to really understand their core structure.
So if for our listeners out there, if they’re interested in getting a second opinion on, you know, what they’re currently doing, I just wanna encourage them to reach out to Parker Financial. They can either do that by visiting the website They can pick up the phone and call us, 360-337-2701. But, you know, the market’s been running really strong now for several years, and I’m, I certainly am optimistic about the long-term prospects of the market.
But if you’re worried that your portfolio may not be properly situated as we go into the last quarter of the year, w- now’s the right time to, to get a second opinion on that. One of the things also I wanna give our clients a tool to use. Remember, there’s, um, there’s an inverse relationship between bonds and prices.
So if interest rates go up, the price of the bond that you own falls. It goes down. And conversely, if interest rates fall, the price of the bond increases. So we’re in an en- an environment right now where we just saw the Fed increase interest rates. So what we would expect is to see bond prices fall as interest rate, uh, interest rates increase.
And you did… I, I think you’ve had some really great conversations with people, uh, when they’re analyzing fixed income, when they’re looking at tools like Google Finance or Morningstar or Fidelity about how they can, um, understand the price movement, what, what those tools are showing when people are evaluating bond mutual funds and ETFs.
Will you speak to that for a minute?
Tim Tenbrink: Yeah. Well, certainly that’s a conversation we’ve had as we think about how the markets have worked over the last several years. Stocks have been doing very well, and so people are looking at their stock. You know, we use ETFs in, in our strategies, and so they’re, they’re looking at their stock ETFs, all of which are just doing really well.
And then they look at these bond ETFs, and they’re not looking so hot. And so it’s led to conversations to just understand, okay, how, how do we evaluate that? And not into– not to get into specific ticker numbers or how that works. It’s important to understand how to evaluate, though, a bond ETF because its whole purpose, the reason you have it isn’t for that appreciation, that capital appreciation, you have it for the fixed income.
And so, um, when you’re looking at a statement, it’s important to understand just the difference of how the movement of a bond value, bond fund value changes compared to that of maybe a stock bond. And so, you know, as I’ve been meeting with our clients, they’re looking at probably going back to twenty twenty-two, the last time we saw, you know, that increase in interest rates that was really steep.
I mean, just dramatic over twenty. Well, that caused the, the value of their bonds to, to drop, as would be expected. What’s important to understand is the reason that those values dropped is because as new bonds were issued that were paying a higher coupon rate, right? That regular fixed income that’s coming in, then the, the values that they were holding dropped, but the yield is still gonna balance out.
There’s a whole bond market, so that all works itself out. That event of seeing that paper loss, in a sense, has caused them to think, “Well, my bond funds just aren’t doing very well.” But the reality is, is that those higher income-producing bonds that have now been added to the ETF has increased the income being generated from those ETFs.
You know, as I’m meeting with people and they’re saying, “Well, I’m looking at my statement and I can see that over the last several years the value of my bond ETF dropped.” For instance, maybe they’ve got 100 shares of that ETF and the price per share has dropped, but that is just looking at the overall price value, the price return of that.
It’s, it’s, it’s comparing what was purchased at the share price and then what the current value is. It’s not accounting for the fact that income has been generated. That income generation has then been used to probably purchase new bond shares at a, at a lower cost basis. So on paper, it seems like, okay, you’ve got a loss there, but in reality that’s not been the case as far as your total return, the total amount.
And just to kind of give our– those listening an example of that, let’s say a client invests $100,000 into a bond ETF. So, so $100 a share, they’ve got 1,000 shares. The interest rates rise and over two years the share price falls about 10%. So now each share is valued at $90 a share. Meanwhile, the ETF has paid out $9,000 in interest income.
Now, it would seem like if you’re just looking at the position line, it’s gonna show 1,000 shares at $90 a share, or what would appear to be a 10% loss. The actual reality is they’ve received nine thousand in cash distributions, making their net return really negative 1,000 or 1%. Yeah. Not negative 10,000. So that’s where, you know, as I’m having conversations with clients and they’re just evaluating just based on the price return, they’re thinking this isn’t performing very well.
But that’s a key indicator of, yeah, but you’ve got to account for the total return, the income that’s been generated that you don’t just see in that one position. So, you know, most of our strategies, we’re reinvesting that income because we want to get it back into the strategy. We’re rebalancing. And so, you know, that works itself out by that income, whether it be a distribution to the client that they’ve taken out or it’s being reinvested by new shares in that ETF according to the strategy at a lower cost basis.
And so that’s where, um, as you evaluate just what these ETFs are doing and their overall performance, we really wanna be looking at total return. And we have that approach across the board of a total return approach. We’re not just targeting, um, yield. We’re targeting the total return appreciation plus income when we’re looking at what our needs for our clients are.
Jason Parker: And that’s the great thing about the performance reporting that should be done on a regular basis too, is that performance reporting’s gonna take into consideration price movements as well as income, so you’re getting the total return picture- Exactly … and you’re not just using Google Finance to pick apart price.
That’s not the right thing to do. You know, the good news is too, uh, Tim, it wasn’t very many years ago that people just couldn’t earn any interest on their money. Like, the savings accounts weren’t ear- earning interest, money market accounts weren’t earning. I mean, they were at 0% for so long. 2022 comes along, interest rates shoot way up, and now there’s this great opportunity to actually earn interest on your money.
The thing that’s driving me crazy is I meet with people and I- they show me how much money they have in their bank accounts and, and, uh, so many bank accounts are still paying 0%. And people don’t realize that the world changed in 2022, and there’s actually yield to be had on safe money. And so that’s another area.
If you’re sitting on a, on a lot of cash that’s just not earning anything, we need to take a look at that and see if we can put that money to better use for you. The other thing I want people to think about is duration. Now, this is a, a concept, um, really helps people understand the amount of risk associated with their bonds.
Duration, let’s say interest rates go up 1% and you have… You look at the bond mutual fund or the bond ETF, and you have a duration of six in that bond mutual fund or ETF. What you would expect to happen is if interest rates go up, then that bond portfolio’s gonna drop by 6% in terms of price movement.
Like, that’s the correlation. So what we found is that high-quality fixed income, short-term, intermediate term is the primary focus. Having a little bit of, uh, longer term fixed income mixed in there can be wise. Again, I don’t, uh, this, today’s podcast isn’t to give specific investment recommendations or advice.
It’s to understand that you wanna be broadly diversified across asset classes, sectors across the entire globe. Um, once you’ve bro- been broadly diversified- Then you want to tilt your portfolio toward the drivers of higher expected return, which are size, price, and profitability. Then once we’ve done that, um, we want to make sure that we have fixed income in there in the portfolio as a ballast.
In our fixed income, we want to have high-quality fixed income. We don’t want junk bonds. Um, we’re willing to sacrifice some return because the stocks are producing the in- the return side of the equation. The bonds are there to produce the safety portion of the equation. And then the other thing is, just like with stocks, we want to be diversified across the entire globe with our bond portfolio as well.
We don’t want to just have US bonds. We can, we can take an international approach to diversifying our fixed income as well, and by doing so, we’re spreading risk out. Diversification’s been called the only free lunch in investing. And, um, the more concentrated we are, the fewer positions we have, the more risk we’re taking in, and we don’t want that in a retirement portfolio.
We want diversification, we want less risk, but we need our money continuing to work for us at a rate of return that’s gonna get us over the finish line, and that’s the key. That’s where the financial plan comes into play.
Tim Tenbrink: And one of the things that has been a hot button issue, s-something certainly clients have asked a lot about, is the value of the dollar and the concern of the devaluation of, of the American dollar, and that’s part of the reason why we’ve got international diversification, ’cause that’s a hedge, in a sense, against the currency.
If you only hold domestic stocks, well, then the devaluation of the dollar is gonna hurt you bad. W- it’s gonna have a worse impact on your, your portfolio, but that’s why we’re including those international bonds. That’s why we have interna- international stocks, um, to give a, a reduction in that, um, currency risk By, by incorporating other markets, other fixed income from different countries that is gonna pro-produce that diversification across different currencies in the globe
Jason Parker: You know, M-Milton Friedman said that inflation is always and everywhere a monetary phenomenon.
And, you know, we’ve heard President Trump saying that they want– he wants lower interest rates. And so one of the things that people should feel good about with the current Treasury Secretary and the Federal Reserve Chairman is that even though Trump has been putting a lot of pressure on the Federal Reserve to lower interest rates, they didn’t, they didn’t do what Trump said.
They, they, they acted independently, which should give people a lot of comfort to know that the Fed is still i- uh, operating independently, even though, um, the– our current Federal Reserve chairman was, um, handpicked by President Donald Trump to be the successfor- successor of Jerome Powell. So that’s a good, that’s a good sign that the Fed is operating independent.
The other thing, though, that we need to be thinking about, because the Fed just did slightly increase in-interest rates. Right now, we’re seeing a lot of inflation in the, in the, uh, in, in the economy, and the Federal Reserve’s concerned about inflation. So they increase interest rates because they’re trying to tighten up the amount of money that people are willing to borrow.
They’re like, “If, if our costs go up to borrow,” then the idea is people are gonna borrow less money. Or, I mean, you, you can think of this just so simply with something like buying a house. Like, the amount of house that you can buy at five percent is a lot different than the amount of house that you can buy at seven percent if you’re basing it on the amount of monthly, um, the, the payment that you can afford every month.
So, um, adjusting interest rates up is a way to try to bring inflation back into check. But one of the things that is a huge driver of inflation in the economy is the price of oil. And obviously, with this war in Iran, the conflict in Iran, um, oil prices have shot way up. And so that’s driving inflation.
And you can see, at least I can, I can see a time when the conflict with Iran’s gonna come to an end. Prices of oil are gonna come back down. This massive amount of oil supply in Venezuela that’s gonna be unleashed back into, uh, the economy is gonna be massive for helping to reduce oil prices. So in some ways, you could say, well, yeah, uh, interest rates are high now, but remember, if interest rates fall in the future, what’s gonna happen to the value of those bonds?
You’re gonna have higher yield, higher income because you’re buying them now, and you could benefit from the price appreciation as a result of interest rates falling in the future. So the hard part about buying an asset when it’s out of favor, like right now, I would say bonds are out of favor. People are afraid of bonds because they’re seeing rising interest rate environments.
But what we encourage people to do is not think emotionally about their money. We want people to rebalance their portfolio. We wanna sell the things that have done really well recently. So we might be selling value stocks or small cap or growth And then redeploying some of that money back into fixed income.
And that’s really counterintuitive. Like, it’s the last thing people wanna do in a rising interest rate environment is buy more bonds. But that’s where discipline removes, um, some of these concerns about portfolio construction and the right time to make moves. Like, instead of trying to time the market, we, um, allow the portfolio construction to be our guide and rebalancing to be our guide for when we’re making these decisions.
And that’s just, that really helps people sleep better at night because we’re removing emotion. It’s like we don’t have to worry about what the nightly news is telling us.
Tim Tenbrink: It just reminds me of how efficient the markets are. As we’ve been watching things the last few years Speaking with clients from that 2022 drop when interest rates went up and their bond values dropped, and it’s like, “Okay, just stay with this.
This is gonna, this is gonna come back around as soon as inflation comes down and interest rates drop.” Well, if you were trying to predict when interest rates were gonna drop, that’s a difficult conversation to have, in a sense. And I’m just reminded of how no one can determine what the future is ’cause, ’cause now here we are, interest rates have gone back up again when we would’ve expecting them to come down.
And that’s why it’s so important instead of trying to predict, to just have a very clear plan to say, “Okay, here’s what the philosophy is.” And when we’re thinking about bond values now, in a sense there’s value there because of the, um, the drop that took place. I- if you held bond values before, they’re cheaper than they were now, or if you’re getting into bonds because maybe you haven’t been allocated in them and now you’re thinking it’s time for me to incorporate them in, well, then there’s a good value there ’cause there’s a possibility that they will appreciate in value as interest rates do come down and inflation ticks down and, um, the economy begins to work itself out.
So I think you’re exactly right. Now, if we were to predict when we’re gonna see that, your guess is as good as mine in terms of when, uh, gas prices come down, when fertilizer prices come down, and then we start to see the effect. But it’s absolutely reasonable to think at some point in the future that will be the case.
The system will work itself out. Those numbers will come down, in which case then you’re gonna be glad that you were invested in these means to capture some of that increase in value.
Jason Parker: I think it’s really important. Th- that, that’s such a good point, and I think it’s so important to remember that the news headlines are designed to sell advertising, and the red bars scrolling across the screen at night are designed to keep your attention.
And if we’re making investment decisions or financial planning decisions or retirement planning decisions based on headlines, we’re gonna have a really bad … We’re just gonna have a real- really bad experience. You know? It’s- Yeah … even if our investments do well, just that constant barrage of negativity is going to make it really hard to stay the course with whatever strategy we’ve employed.
So the key is to have a good plan, um, be broadly diversified, rebalance your investments to maintain that asset allocation. Rebalance is gonna for- Rebalancing never feels good. It always feels- Yeah … like I’m making the wrong decision at the wrong time. But really what rebalancing is, is it’s a risk mitigation tool.
It’s not a tool to help you enhance returns, it’s as much as it is a re- a, a tool to help you reduce risk in your portfolio. And for most people heading into re- into retirement, again, they’re really not trying to Most people are not saying, “How can I make as much money as possible?” Most people are saying, “Look, I don’t ever want to become a burden to my family physically or financially.
How can I set things up? How can I construct things? How can I make decisions in a way that’s going to give me the greatest degree of confidence in a very, in a world where there’s just a lot of uncertainty?” And, and, and frankly, the uncertainty’s such a good thing because that’s what we get compensated for.
We get compensated for taking the risk of uncertainty. Yeah. That’s a, that’s a good thing.
Tim Tenbrink: Absolutely, and that is part of being an investor, and I’m thankful that, you know, the work we do is to help people stay disciplined. We have a, a, a rules-based, evidence-based approach. We’re not talking about bonds because we think that’s the next hot thing, and you should be…
You know, we don’t have an inside track on the markets. What we’re talking about is using the best academic research, modern portfolio theory, and developing a strategy that we know works over time. And for our clients, the majority of whom are in retirement and looking for that stable return, this is how you go about that.
Yeah. Um, that’s, that’s our philosophy, and that is a specific in- phil- philosophy instead of just guessing and hoping and, um, thinking that you’re smarter than the markets are. It is very, it’s a evidence-based approach, and I appreciate it’s hard to have the discipline. We have some conversations with clients that are uncomfortable because they want to see a change when we’ve got to stay the course.
But I’ve seen over my time, and I know you have over your many years of investing, where y- you just encourage a client to stay the course, and then down the road, we can look back and say, “See? Here’s why we stayed the course. Aren’t you glad you did?”
Jason Parker: Yeah, exactly. That’s exactly right. Well, this has been a fun conversation about, um, bonds, fixed income, portfolio construction, having a financial plan.
Tim, is there anything… You know, you had, uh, shared with me before the show talking about a ship and, um, a ship at sea and, um, uh, you, and the, and how the, the word ballast is used in that context. Would you share that idea? ‘Cause I think that was a really powerful thought just about the, this terminology that we use.
Tim Tenbrink: Yeah. When we think about a retirement portfolio, like a ship navigating the, the market currents, and that is absolutely part of being an investor. There is a tide that goes in and out. You know, I wish that we could just have smooth seas forever that… But that’s, like you said, you’re compensated by taking on risk.
You have to navigate into un- uncharted waters in a sense. Um, and equities act as that engine for long-term growth. You gotta have equities. If you’re just starting retirement, you might have 25 or 30 years of retirement, so you need a, a growth engine. That’s your equities. Um, but high quality zero junk bonds, they act as that anchor, that ballast.
They keep the vessel steady. You don’t measure success by an anchor by h- by how much speed it adds. You measure by whether it keeps the ship upright in the mark- when the market seas get rough.
Jason Parker: Exactly.
Tim Tenbrink: And-
Jason Parker: I love
Tim Tenbrink: that
Jason Parker: visual … you know,
Tim Tenbrink: when, when things are going crazy, that’s when we’re able to, to, to say, “Okay, here’s why we’ve got the bonds that instead of being down this much, you’ve got a more, um, manageable recovery At this crucial stage in retirement where you’re dependent upon the income from this portfolio.
And so that’s, that’s where those ballasts come into play. We’re not judging it based on the growth it brings. We’re judging based on the stability, and that goes back to, again, the intention. Why are we incorporating high-quality diversified bonds across different durations across areas of the globe?
Because we’re looking for that stable ballast that’s gonna keep the portfolio from, um, sinking down in the tough s- the tough seas. And that is the fact of we’ve prepared. We don’t want to react to the markets, but we want to prepare for those s- rough seas that come. As I, as I meet with someone who’s maybe in their mid-60s and getting ready to retire, I’ll explain to them, “You know, in the next 25 years of investing, you’re gonna have to navigate some recessions.
You’re gonna have to navigate some market corrections. In 25 years, you, you, you… probably multiple of those you’re gonna have to do.” So that’s why we want to have the stability and ballast because i- if we could see it coming, then we would just avoid it, but the reality is, is that’s not the, the truth about investing.
No one can predict that. And so we want to, we want to prepare so when the time comes, you can have confidence and, um, you can be able to sleep at night and have freedom knowing that there’s a clear plan of action here. There’s an intentionality to why we built it the way we have. And your sea- your, your seas are gonna be a little bit rough, but your, your ship will hold.
It won’t go underwater in those rough seas.
Jason Parker: Well, we can’t guarantee it, but we can make every preparation and plan to avoid it. That’s for sure.
Tim Tenbrink: Well, that’s why, that’s why, um, you know, we professionally want, want to be able to, to do that, to give that clarity and confidence so that we can navigate those difficult waters.
Yes, it’s not a promise, right? None of us can guarantee that, but we want to do our very best to have you positioned to be able to, to navigate that wisely.
Jason Parker: And Tim, I don’t know about you, but when you have that opportunity, when I have the opportunity to sit across from people, whether it’s on Zoom or in the office, and they’ve never had a financial plan built for them, and then that, um, sense of “Boy, we’re gonna be okay,” and just th- th- what that opens up in them.
Um, it’s, to me, one of the greatest things about being a financial advisor that does the comprehensive financial planning, and then being able to marry the investments to the plan, is just getting to see how people respond to that when they know that they’re gonna be okay. They’ve gone from, um, an area of uncertainty to an area of confidence, and it’s like, ah, gosh, that’s such a wonderful feeling.
I just wanna encourage the people out there today, if you’re not sure about what’s happening, um, you don’t have to do this alone. You- we’ve got advisors here at Parker Financial. This is what we do all day, every day. We help people navigate this. We put together comprehensive plans. We put together in- uh, comprehensive investment strategies, and our purpose is to del- deliver three things to the people we serve: clarity to know what’s most important in your life, confidence to know the numbers are gonna work, and ultimately, when you have those two things, you get to experience freedom, freedom from fear, freedom from greed, and just freedom to go out and live your best life with the people that are most important to you
Tim Tenbrink: Yeah.
If your sole confidence of your retirement plan is based on the, the total value of your account balances and that’s it, that’s gonna be a very uneasy retirement. And that’s where you need a plan to know I’ve got a, I’ve got a cashflow plan. I know what my expenses are, I know what my income is, and I know I can navigate through these rough times instead of just looking at that, that portfolio balance and panicking because it’s down.
Jason Parker: Yeah. Yeah. So good. Well, Tim, I appreciate you being here today to have this important conversation. Anything you wanna leave our listeners with before we finish today?
Tim Tenbrink: I think everything we’ve covered. If you don’t have a good plan, we can help you with that. That’s the important piece, starting with a plan and then making good wise decisions so you can have confidence through retirement.
Jason Parker: Yep. We’ll help evaluate the investment strategy. We’ll look at the duration risk of the portfolio. We’ll uncover if you have junk bonds or high yield stuff that potentially could cause you harm in the future. And well, I, I thank you so much for being here. Thanks, Tim.
Tim Tenbrink: Thanks, Jason.
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Investing involves risk. Jason Parker is the president of Parker Financial LLC, an independent fee-based wealth management firm located at 9230 Bayshore Drive Northwest Suite 201, Silverdale, Washington. For additional information, call 360-337-2701 or visit us online at soundretirementplanning.com.
