At Howard Bailey Financial, we understand that every financial journey is unique. Our team is dedicated to helping clients navigate a wide range of situations, from planning for a secure retirement to managing unexpected life transitions. The case studies presented here are based on real experiences, offering a glimpse into the challenges our clients have faced and the solutions we’ve developed together. To protect privacy, names and identifying details have been changed, but the stories remain authentic.
Making Adjustments to Avoid Stock Losses
Nate and Erica, a couple in their late 50s, were five years away from retirement when they came to Howard Bailey Financial for guidance. Both had built successful careers and had diligently saved for retirement. As they approached the critical years leading up to retirement when financial missteps can have long-lasting consequences, they saw a need to make adjustments but weren’t sure where to begin.
That’s when they reached out to Howard Bailey Financial. When meeting with their Financial Advisor, Nate and Erica expressed concerns about whether their current strategy would allow them to live their dream retirement.
The Challenge
For more than 20 years, Nate and Erica maintained a consistent investing strategy, with the majority of their retirement savings allocated in a 401(k) and a significant portion of that in an employer stock fund. They felt confident in the company’s reputation and noted that previous market downturns had always been followed by recovery periods within five years.
However, as we reviewed their portfolio, it became clear that their heavy reliance on employer stock exposed them to unnecessary risk. Any significant decline in that single stock’s value could derail their retirement plans. Additionally, their overall investment strategy was still aggressive, with a focus on growth rather than preserving capital—an approach better suited for earlier stages of life.
The Solution
After meeting with Nate and Erica, their Financial Advisor presented a strategy that would gradually reallocate their 401(k) over the next five years. By reducing their exposure to employer stock and shifting to a more diversified portfolio with a fixed income component, Nate and Erica could lower their overall risk. While this less aggressive position would likely reduce their average rate of return, it aligned with their need for stability and security in the years leading up to retirement.
The Results
Over the next 12 months, the employer stock lost nearly half its value due to unforeseen organizational changes within the company. While many of the company’s employees faced the harsh reality of delaying retirement, Nate and Erica’s diversified approach shielded their portfolio from the brunt of the loss.
Today, Nate and Erica are on track to retire as planned, with a well-balanced portfolio designed to support their lifestyle and long-term goals. Their story is a testament to the importance of adapting investment strategies during the few years directly preceding retirement to achieve both security and peace of mind.