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Category: Financial Planning

Spending in Retirement – An Observation

Spending in Retirement – An Observation

Most of the people I am surrounded by are first-generation wealthy and I bet very few would even describe themselves as wealthy. One of the reasons they wouldn’t describe themselves as wealthy is because, in most cases, they came from meager backgrounds so the idea of being considered wealthy in any sense of the word is almost a foreign concept. Recently, I think I stumbled across an observation I have never noticed before with regard to spending in retirement. That…

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When It’s Smart to Pay Capital Gains Taxes

When It’s Smart to Pay Capital Gains Taxes

Imagine for a moment that you are the coach of a Major League Baseball team and you’ve successfully coached your team to the World Series. You’re about to start the 9th inning of Game 7 and your team is up 3-1. You are just three outs away from being crowned World Champions. A life-changing opportunity for players and coaches alike. But before the 9th inning begins, you visit the opposing team’s dugout and ask their coach if they’d like to…

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Life’s Curveballs

Life’s Curveballs

Over the weekend, I went for a run as I often do. I time myself for every single run and I generally run the same route each time. Some might consider that boring, but I do it because it gives me a number to shoot for. If I run different routes, I can’t compete with myself to try to beat my best time. If you think that’s silly, I totally respect that. But all I did growing up was play…

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The Only Benchmark That Matters

The Only Benchmark That Matters

Each day, investors everywhere compare their portfolio’s return to a benchmark. Many times, at least for investors in the U.S., the benchmark of choice is the S&P 500. I find it endlessly fascinating because a benchmark is simply the average of all investor returns before costs. This is not opinion, but fact. John Bogle, the late founder of Vanguard, said it this way in his book “Common Sense on Mutual Funds“: All investors own the entire stock market, so both…

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Medigap or Medicare Advantage Plans

Medigap or Medicare Advantage Plans

As an advisor working with retirees, one of the most common questions I am asked is, “Should you choose Medigap or a Medicare Advantage Plan?” Before I get to that, I’ll lay out an example for why this choice exists in the first place and then we can get into the weeds of these two plan options. I’ll also provide pros and cons for each coverage type and who each coverage might work best for as well as what you…

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How to Invest For a 30+ Year Retirement

How to Invest For a 30+ Year Retirement

A couple of weeks back, I had the pleasure of chatting with Taylor Schulte, CFP® on his retirement podcast, “Stay Wealthy.” Taylor is a highly respected retirement expert, so naturally, I was excited to have a public chat about a topic we are both passionate about. On the podcast, we discuss my post, A Portfolio Strategy for 30-Year Retirements, to include the following topics: Why living longer should be a goal to strive for and why you’ll probably live much…

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A Portfolio Strategy For 30-Year Retirements

A Portfolio Strategy For 30-Year Retirements

PLEASE NOTE: This is a long post, but I passionately believe that if retirees have any chance of getting things right, they must properly understand all the underlying assumptions they are making in their retirement planning decision process. And because I view the subject(s) of this particular article to be so important, I wanted all the thoughts in one place instead of being spread amongst three or four individual posts – especially since these issues are inseparable in nature. If…

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Why Average Market Returns Mean Nothing

Why Average Market Returns Mean Nothing

David Hultstrom of Financial Architects puts out a great quarterly newsletter for financial advisors (and a great one for investors as well). In the most recent version of his advisor newsletter, he posted the following chart below with some great commentary that I wanted to share with you. The average compound return (i.e. geometric) is 9.75% (red line). Only in 1992 did an annual return round to 10%. In only 5 out of the 93 years was it even within…

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Why I Choose to Focus on Helping Retirees

Why I Choose to Focus on Helping Retirees

Given that I focus exclusively on retirement planning for individuals, I am often asked the simple question, “Why?”. There are three primary reasons: (1) It’s needed. The American College conducted a retirement literacy quiz with over 1,200 Americans age 60-75 with at least $100,000 in household assets (not including their primary residence) and the results were putrid. • Retirement literacy remains low – 74% failed the 38-question retirement literacy quiz!• Roughly 5% of respondents scored a B or higher (80%+).•…

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The Problems With Behavioral Investment Advice

The Problems With Behavioral Investment Advice

In a recent Morningstar article titled, “Do Investors See Financial Advisors As Behavioral Coaches?“, Samantha Lamas discussed survey results regarding what investors find most valuable about financial advisors. What I found most interesting wasn’t what rated highly, but what rated poorly. In the survey, Morningstar asked individual investors to rank a specific set of attributes by order of importance. The list of attributes is here: In particular, many planners (myself included) believe one of the most valuable things we bring…

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