Joseph Webb

If you’re like many Americans, you’ve probably left the gas station in high spirits recently. Over the last 12 months, the bench- marks for oil and gas prices show a 50 per- cent decline. While this is good news for baby boomers and pre-retirees worried about inflation in retirement, know this: there’s a negative for every positive.

Despite the savings at the pump, the recent decline in gas prices could spell trouble for many Americans preparing for or already in retirement. To illustrate this, consider how recent price decreases have affected the Teacher’s

Retirement System of the City of New York, one of the nation’s largest pension programs. From June 2014 to June 2015 educators and other pension workers saw $135 million in- vested in oil and gas get erased from its books.

If you think pension investments may not represent your exposure to oil and gas related price changes, consider this: 40 of the companies represented in the broad S&P 500 index are energy companies. This means that many ETFs and Mutual Funds linked to the S&P have also been affected by recent losses. Bruce Picard, the lead portfolio manager for MassMutual RetireSmart Funds said: “Most major pension plans or retirement plans, unless they have a very different approach than most everybody, we’re going to have some exposure here.”

So where does this leave those preparing for retirement?

The first thing to analyze is what your exposure to oil and gas really is. Despite the dizzying losses mentioned in the New York Teacher’s Pension, oil & gas represented just one percent of their total holdings, meaning that diversification helped hedge against potentially massive losses.

The second thing to consider is what matters most when it comes to retirement planning. As a financial professional who is more intent on planning for income in retirement than purely pursuing growth strategies, I believe that income in retirement is of paramount importance. There are many different tools that can accomplish the goal of generating in- come in retirement, but the thing I want to stress is that when your needs change, your approach to planning needs to adapt as well. Preparing for retirement is all about saving and investing for growth. But when we transition into retirement itself we need to consider vehicles that are in- tended to efficiently distribute income in a reliable way to give us paychecks we can count on.

Joseph Webb is a Registered Principal with Profit Planners Management. The organization provides investment services, asset protection, tax strategies, specialized insurances and survivor assistance. For more information, visit