Stellar Strategies for a Secure Retirement Pt. 2

byChase Ross

Tue Feb 06 2024

@ CompanyLLC
Stellar Strategies pt 2

In part one of this series, I outlined several strategies for ensuring a secure retirement.  Here in part two, I’ll continue to discuss a few more proven strategies to get you on your way towards your financial goals.  


Galaxies, like our Milky Way, are made up of billions of planets, stars, dust, gas, dark matter, black holes and more(1).  Photos of the Milky Way depicting the immense diversity of these celestial bodies are breathtaking.  This leads to another very important retirement strategy – diversification.  Diversification is typically understood to be investing in different asset classes (stocks, bonds, real estate, etc.) and should be part of a larger risk management strategy.  Another important way to diversify is to include different sectors of the market in your portfolio.  In 2023, the S&P 500 ended the year up 24%.  However, most of this increase (estimated at 75%(2)) came from the top seven tech stocks on the market (‘Magnificent Seven’): Nvidia, Apple, Microsoft, Alphabet, Amazon, Tesla and Meta.  This may have benefited most this year.  But many people still remember the tech bubble bursting back in the early part of the millennium.  By including energy (-4.8% in 2023), industrials (16% in 2023) and others(3), you can mitigate any losses while also seeing real gains in your portfolio over time.  Other diversification strategies could include a mix of domestic and international assets, market capitalization size (small vs. medium vs. large) and many more.  No risk management strategy will be perfect.  And it will change as you get closer to retirement, or your financial goals evolve.  

Emergency Fund

The one force that holds all those celestial bodies together in the Milky Way galaxy is gravity.  Gravity is what maintains planets like our solar system in orbit around our Sun.  Gravity is what provides stability to the system.  And there is no better way to maintain stability in uncertain financial times than having and maintaining an emergency fund.  

Over the summer of 2023 it was shown that hardship withdrawals from 401k accounts had increased 36% year over year(4).  Employees of certain 401k plans may be allowed to take out money from their account due to qualifying events that cause a financial hardship.  However, there are serious consequences for taking this money out including: 

  • Income taxes on any untaxed money taken out

  • An additional 10% tax (unless you’re 59 ½)

  • And you may not be able to contribute to the plan for 6 months until after the distribution of the money

  • Not to mention the reduction in overall savings to be able to be used during retirement

But a solid emergency fund can help you avoid this type of mistake.  A good emergency fund should include at least 3-6 months of expenses.  Factors such as income and number of dependents should be considered when determining the amount to be saved.  Keep in mind, this fund is for emergencies only!  Other savings should be earmarked for vacations, a new car, etc.  This type of fund not only saves you the stress of dealing with an emergent issue now, but also ensures the safety of your retirement nest egg in the future.  In a time when only 45% of Americans can cover a $1,000 emergency without reverting to a credit card or loan (or hardship withdrawal)(5), this is the stability only the gravitational pull of an emergency fund can provide.  

Lifecycle Funds

The Apollo 13 spacecraft, as depicted in the 1995 Tom Hanks film, experienced an explosion in one of its oxygen tanks.  The resulting explosion disrupted the trajectory (among other things) of the ship on its way to the moon.  Part of the rescue mission was to determine how to get the damaged ship back on a “free-return” trajectory and back home to earth.  Due to the bravery of the astronauts and the ingenuity of NASA engineering, they were able to accomplish this task and safely return the three astronauts to Earth(6).  

A spacecraft is constantly changing its trajectory for different stages of a mission.  A lifecycle (or target retirement) fund is similar in that it also changes trajectory as time goes on.  These types of funds are designed to maximize returns early on and gradually become more conservative as the target retirement year of the fund approaches.  These are popular funds in many 401k plans since they require little maintenance and oversight by the investor.  You simply pick the fund with the year you plan on retiring and add your contributions every pay period.  

This is a good option if you want to take a hands-off approach to retirement investing and not actively manage your portfolio.  Or if you do not initially have the time to do the research on the plethora of investing options your 401k plan may offer and want to ensure you don’t miss out on any investment time.  Just be sure to do a little research on the expense ratios and fees associated with any lifecycle or target retirement fund.  

Healthcare Planning

Spacesuits are designed for the extremes of space and to ensure the survival of the spacewalking astronaut.  In a similar manner, thoughtful healthcare planning can help shield your retirement savings from the extremes of medical expenses.  

It’s important to understand the different parts of Medicare (A, B, C and D) and the different coverages they’ll provide.  Other healthcare planning considerations include supplemental insurance which cover the gaps that Medicare doesn’t provide coverage for (eye exams, dental, long term care, etc.).  Another consideration is utilizing a Health Savings Account (HSA) which is typically offered along with employee sponsored high deductible health plans(7).  These accounts are considered, “triple tax advantaged.”  This means:

  • The money contributed to an HSA comes out pre-tax

  • The contributions grow tax free

  • Distributions from an HSA are tax free for qualifying medical expenses

Keep in mind there are contribution limits to these accounts but being “triple tax advantaged” really means you can maximize the benefit from this type of account during retirement years.


There are certainly more strategies that could be considered for the ideal retirement plan.  But an overall retirement plan that includes these strategies at a minimum will certainly rocket any financial goals to the stratosphere.