In his book A New Look at Retirement, financial advisor James F. Locke's revolutionary yet simple approach to retirement planning challenges conventional notions. While most financial advice focuses on growing assets as much as possible, Locke reveals why this strategy - which works well during the saving years - can backfire disastrously in retirement.
The essence of Locke's philosophy lies in an equation that seems simple at first glance: total return = income + growth.During the years of work, the total return is the most important. But as retirement approaches, the source of that return becomes critical. By prioritizing steady income (income) over unpredictable growth (growth), you can create a renewable resource that provides consistent cash flow regardless of market conditions.Through clear explanations and compelling case studies, Locke shows how investors who continue to focus primarily on growth well into retirement may be forced to sell their assets during market downturns—a strategy he calls “capital drain.” In contrast, those who restructure their investment portfolios to generate sufficient interest and profits can ride out market fluctuations while keeping their capital intact.
The book provides practical guidance on:Apply an “income first” approach using various investment vehicles, choosing appropriate annuities (and avoiding inappropriate ones), optimizing Social Security benefits based on your particular situation, using Roth conversions strategically to manage your tax burden, handling mandatory minimum distributions without depleting your savings, creating an effective estate management plan that protects your legacy, and finding a fiduciary advisor who specializes in retirement income.
