Independent Wealth Management
Who scrutinizes your investments, designs and tests your retirement and education plan, searches for new investment ideas, patrols insurance agents and mortgage brokers, shows you strategies designed to reduce your investment costs and income taxes, monitors your 401(k), promptly responds to your email, provides one monthly statement, day-to-day net performance across all of your accounts and does all of your paperwork...We do!
Entries in Retirement (6)
4 Retirement Reality Checks
Living a comfortable retirement means planning for how much you will need now, when you have the ability to put away the money to do so. What is your picture perfect retirement? Are you…
• Living on a boat, seeing the world one coast at a time…
• Travelling, seeing all of those places you have imagined over the years…
• Spending time at home with your grandchildren, enjoying friends….
• Starting a business or investing more time in a lifelong hobby.
Today's retirees are doing much more than they used to….and the costs of retirement are also much different. In order to better understand how much in assets you need to accumulate (and earn in company pensions and social security), to live the type of life you want…you should know what your retirement life is really going to be like. What should you be planning for?
Rafael Velez
in Financial Planning, Retirement
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Real Cost of Retirement Living
Your long-term goals and medical condition will dramatically impact the true cost of retirement. In the past, it was common for people to enter retirement facilities such as nursing homes when they were too old to care for themselves or their home. Today, most people intend to stay in their home as long as possible but are willing to consider alternative living arrangements such as retirement communities and assisted living facilities to provide them with sense of community and assistance they need.
As you plan for retirement, you must take into consideration the true cost of retirement housing, in any form. Retirement communities, assisted living or skilled nursing facilities or simply staying in your home are all viable options. The question is what are the likely costs of each of these decisions?
Senior Independent Living Facilities
Long Term Health Care
Skilled Nursing Facilities
Staying Home
Rafael Velez
in Financial Planning, Retirement
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Sequence of Returns Matter
Getting off on the right foot is nowhere more important than in retirement. This is true in general, but especially about portfolio returns. The better the portfolio returns in the early years of retirement, the better the chance of having the picture book retirement scenario we all strive to create. If this is so, why do so many portfolio illustrations use an average rate of return of 8%? Not nearly enough information for retirement income planning purposes. How do portfolio projections differ before and after retirement and what are the factors that impact portfolio sustainability? A quick look at these issues can give a better understanding of recommendations for withdrawal rates, multi-tiered income strategies and other retirement funding techniques that can be utilized to secure reliable retirement income.
There has yet to be a period of time where the market consistently returned 8% per annum. But the popularity of using 8% average rate of return for financial illustrations is very common. These simple projections are adequate for pre-retirement portfolios as the fluctuations in returns have less impact during the accumulation phase. Ideally, with regular contributions and average market returns the portfolio will grow because it only has to contend with fees and tax expenses. The added burden of withdrawals that begin upon retirement is the major differentiating factor on portfolio performance. Contrary to the accumulation phase, once withdrawals are added to the mix, the timing of the returns becomes dramatically more important. To understand why, an explanation of the components used in retirement income simulations will be helpful. Retirement income simulations have at least four components...
Advice for 401(k) Retirement Plans
Remaining inactive in the stock market is one of the keys to investing. There is an increased probability of error when looking at the stock market when prices are setting new lows or highs. A better idea; find something to take your mind off of the “noise” in the financial markets. Warren Buffett of Berkshire Hathaway plays bridge and his partner Charles Munger works on his mental models to fill the time. Challenge yourself to delay decisions at least one day, as this is an effective tool for investors to make sound decisions. Warren Buffett once said, “It is better to do nothing at all than to do something stupid.”
