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Category: Financial Planning

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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10 Charts About Retirement Every Retiree Should See

10 Charts About Retirement Every Retiree Should See

As a Retirement Planner, I eagerly await the release of J.P. Morgan’s Guide to Retirement. It is essentially a booklet of slides filled with a ton of great information impacting retirees. Making it even better, it often highlights things that are regularly overlooked by just about anyone (including professionals) planning for retirement today. With that in mind, I’ve selected 10 charts that I think everyone transitioning into retirement should see with a little commentary on each. Every chart comes directly…

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Spending Your Life Savings – Two Ideas For Overcoming the Fear of Spending in Retirement

Spending Your Life Savings – Two Ideas For Overcoming the Fear of Spending in Retirement

Retirement should be one of the most fun times of your life. But, generally, that’s only possible if you’re comfortable spending your life savings. I find that there are two psychological barriers that tend to restrict spending in retirement that I think are largely overlooked by the retirement community. If you intend to get comfortable spending in retirement, it helps to be aware of these barriers and find strategies to deal with them directly. Self Worth = Net Worth By…

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One Bad Decision Is All It Takes

One Bad Decision Is All It Takes

There is a saying in professional golf that, “You can’t win a tournament on Thursday, but you sure can lose it.”  For the golf uninitiated, every professional golf tournament starts on Thursday and concludes on Sunday.  So, a good round on Thursday can put you in position to win with three rounds to go, but a terrible round on Thursday is likely to result in missing the cut and any chance at a paycheck. Retirement planning follows a very similar…

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“Optimal” Retirement Planning Strategies

“Optimal” Retirement Planning Strategies

I read articles regularly that discuss optimal portfolio withdrawal strategies.  I think these articles are great but are probably best kept in the academic world.  In other words, they should not be given to clients.  I have a friend that was forwarded one of these articles by an advisor as the basis for their retirement planning decisions and asked for my thoughts.  Don’t get me wrong, it’s great that this advisor is staying up to date on the latest research, but…

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New Page: Retirement Resources

New Page: Retirement Resources

The post this week is not a typical one.  I hope it is obvious based on my website name plus the content that I write that I am passionate about the subject of retirement planning.  I am also passionate about #RetirementLiteracy and improving the lives of retirees everywhere. There are many issues that I believe retirees should be educated about prior to turning in their retirement papers but often are not.  This is true regardless of net worth and regardless of…

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“Best Interest” is not Black & White

“Best Interest” is not Black & White

Back in March, the CFP Board voted to require every CERTIFIED FINANCIAL PLANNERTM professional that provides financial planning to be held to the duty of care of a fiduciary starting October 1, 2019.  I greatly applaud this move!  For folks not in our industry, if an advisor is a fiduciary, then that advisor is legally and ethically required to put your best interest before their own. Up to this point, the CFP Board separated the level of care required between planning…

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