Ready For Retirement

Episode: I’ve Never Seen So Many Retirees Make This Same Mistake
Host: James Conole, CFP®
Date: January 11, 2026

Overview: Main Theme & Purpose

James Conole addresses a pervasive and costly mistake he observes among retirees, regardless of whether they've managed their retirement savings themselves or worked with a financial advisor. The episode unpacks why so many people fall into either a risky, concentrated portfolio or a generic, "cookie cutter" 60/40 stock-bond allocation—and why neither approach is usually aligned with a person's specific retirement needs. James provides case studies and actionable strategies to help listeners avoid these pitfalls and create a truly personalized, resilient retirement portfolio.

Key Discussion Points & Insights

1. The Two Common Retirement Portfolio Mistakes (00:00–05:30)

• Mistake #1: DIY investors stick with what's worked

  • People who manage their own investments often enter retirement heavily invested in what’s worked for the past decade—typically U.S. stocks, especially large tech stocks—without considering the risks of continued concentration during withdrawal years.
  • "What got you here won't get you there. What's worked to get you to retirement will not work throughout retirement." — James (23:38)

• Mistake #2: Advisor-led, “cookie cutter” 60/40 portfolios

  • Those who work with advisors are often placed into a standard 60% stocks / 40% bonds portfolio, based on generic risk questionnaires or age, rather than their real cash flow needs.
  • "Why 60/40? Why on earth is that the default portfolio that's recommended to all people?" — James (31:12)

2. Case Study #1: John—The Perils of Staying Concentrated (05:31–17:10)

• Situation: John, 62, has $2M, all in NASDAQ/growth stocks, confident because of strong historical returns (S&P: ~14%/yr, NASDAQ: ~17%/yr since 2010).
• Event: In 2022, the NASDAQ falls 33%. John's portfolio shrinks from $2M to $1.34M. After withdrawing 5% ($100k), the value drops to $1.24M (38% loss).
• Mathematical Reality:
  • Losses require much higher gains to break even: a 38% decline needs a 61% rebound just to get back to original value, not even counting withdrawals.
  • With repeated withdrawals, percentage draw each year increases, risking running out of money far sooner.
  • "It doesn't matter what the average return is on your investments. If you're pulling too much of your capital out early on ... it's going to be a bad experience." — James (20:02)
• Core Concept: Sequence of return risk — order of returns, not just average, matters during withdrawals.

3. Case Study #2: Lisa—The Hidden Cost of “Safe” Assumptions (17:11–36:12)

• Situation: Lisa, 62, also has $2M, follows her advisor’s recommendation into a 60/40 portfolio.
• Key Questions James Asks:
  • What are Lisa’s real cash flow needs? What portion is covered by pension/Social Security?
  • How much does she actually need to pull from investments? (For Lisa: $40k/year)
  • Is she emotionally comfortable with market volatility?
• Why Generic 60/40 May Be Wrong:
  • Bonds serve a specific function: provide consistency and a “moat” against sequence risk; not meant for arbitrary splits.
  • If Lisa only needs $40k/year from investments, and a prudent reserve is 5 years' needs in bonds ($200k), that's just 10% in bonds—a personalized 90/10 mix, rather than 60/40.
  • "Your allocation should be a direct reflection of your needs, not simply this templated cookie cutter portfolio allocation that unfortunately too many people are put into." — James (35:03)
• Potential Missed Growth:
  • Assuming 8% annualized return (90/10) vs 6% (60/40) over 30 years, Lisa’s ending balance could be over 85% higher with the tailored allocation—millions of dollars left on the table with a generic approach.
  • "What else could you do with a few million more dollars in your retirement years?" — James (36:12)

4. The Solution: Tailored Portfolio Design (36:13–42:00)

• Neither John nor Lisa had portfolios reflecting their lives—John's was too risky by sticking with old habits, Lisa's too conservative by default.
• Core Solution:
  1. Start with a retirement plan: define your actual cash flow needs, income sources, withdrawal needs, lifestyle wishes, and tolerances for risk.
  2. Build your investment allocation as a support for those needs—don’t just use a standard model.
  3. The stock/bond split emerges after the plan, not before.
• Notable Quote:
  • "At the end of the day, your portfolio shouldn't just reflect your age, it will reflect your life." — James (41:10)

Notable Quotes & Memorable Moments

• [00:23] "I've never seen so many retirees make the same portfolio mistake at the same time ... It's not because they're trying to chase returns ... It's because they're taking a very cookie cutter approach without actually knowing it." — James
• [23:38] "What got you here won't get you there. What's worked to get you to retirement will not work throughout retirement." — James
• [31:12] "Why 60/40? Why on earth is that the default portfolio that's recommended to all people?" — James
• [35:03] "Your allocation should be a direct reflection of your needs, not simply this templated cookie cutter portfolio allocation that unfortunately too many people are put into." — James
• [41:10] "At the end of the day, your portfolio shouldn't just reflect your age, it will reflect your life." — James

Timestamps for Important Segments

• 00:00–03:15: Introduction—The widespread mistake retirees make
• 03:16–07:42: Describing the two “paths” to the same problem
• 07:43–17:10: John’s case study—the danger of sticking with what’s worked
• 17:11–31:12: Lisa’s case study—the downside of generic advisor portfolios
• 31:13–36:12: Why allocation should follow needs, not arbitrary templates
• 36:13–41:10: Steps to create a personalized retirement portfolio
• 41:11–End: Final advice—start with the plan, not the allocation

Takeaway: Action Steps

1. Start with a Plan: Determine your cash flow, income, needs, and life goals for retirement before touching your portfolio.
2. Reverse Engineer Your Allocation: Let your spending needs, risk tolerance, and income sources dictate the right mix of investments, not a rule of thumb.
3. Challenge Default Assumptions: Question both risky concentrations and standard industry allocations like 60/40—neither might fit your reality.
4. Protect Against Sequence Risk: Ensure you have enough “safe” (bonds or equivalents) to fund withdrawals in market downturns, but don’t overdo it at the cost of long-term growth.
5. Review Regularly: Revisit your plan as your needs and circumstances change.

"Retirement risk when it comes to your portfolio—it’s not volatility. It’s a mismatched portfolio that doesn’t reflect your unique risks and your unique needs in your unique overall plan." — James (40:10)

This episode is essential for anyone wanting to avoid the trap of one-size-fits-all retirement advice and highlights the importance of mapping investment strategy to genuinely personal retirement circumstances.