Retirees need to earn more on investments
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Eric Soiland, CIMA: In his own words

Eric Soiland is a Certified Investment Management Analyst who has been working with pre-retired and retired clients for 20 years; the last nine of them working for Citi Smith Barney in Walnut Creek, Calif.

Risk
Typically, most people look at risk as the potential for fluctuation or loss in an investment portfolio. Another risk is running out of money before they die. That could be due to inflation, health care costs, long-term care costs or unforeseen events. I try to get them to picture in their mind the best portfolio we can put together that will help them maintain their current lifestyle. Over a 20-, 30- or 40-year retirement you need to have growth to counter inflation. A lot of individuals automatically think that when they get near retirement they need to become very conservative. That may have been true many years ago when people died five or 10 years after retirement, but it's not the case now.

I don't twist anybody's arm; I just explain the trade-off. If you want to sleep extremely well now then the trade-off may be that down the road you won't be sleeping well because your portfolio hasn't kept up with inflation. If you're willing to take a little more risk many times you can greatly enhance the odds in your favor. I try to get the overly conservative investor to see the sense of a more diversified, more aggressive portfolio.

The zone
What is most important, in my opinion, is the five years before retirement and the five years after retirement. It's a zone, a 10-year window, that's very critical for most retirees.

A lot of planning goes into the five years leading up to retirement. That's when you want to review your current assets, estimate anticipated assets, determine your expenses, check your insurance coverage and work up a plan with your financial adviser to see if there's a gap that needs to be overcome. Then, if you can get through the first five years of retirement without any really negative setbacks to principal, there's a good chance you can maintain your current lifestyle in retirement if you stick with a prudent withdrawal plan.

Start early
The sooner people get serious about retirement, the better. If someone has 20 years to go before retirement and they start planning now, they're in a much better position to know what they need to save and to be able to hit that goal than someone who's two years away from retirement and is finding out they haven't done a very good job.