Creating Retirement Income

How can you find reliable income? Interest rates are at all time lows. This means that returns from "safe" investments such as bank savings, money markets and bonds are extremely low.

Stocks and real estate create more income but they may seem too risky. In today's environment, you need a comprehensive plan to assure you have the income you need without taking excessive risks. Here is how to do it!

Warning! - This is not your parent's retirement! We will not return to a world where people can collect a pension and Social Security check, put their savings in bonds and CDs and live comfortably off the income. You are now responsible for planning, and funding, your retirement. For many, this is a daunting task. We can create a personalized income plan so you can get on with living.

Everyone's situation is different. Cookie cutter plans and online calculators cannot address your situation. We develop and help you implement your customized personal plan. We go through a rigorous process including these steps:

Setting the Parameters

•    What does retirement mean to you? Do you want to continue working, just at a slower pace? Switching careers? Travel? Volunteering?
•    How much will it cost? Living arrangements through stages of retirement. How will I pay for health care? Leaving a legacy.
•    Understanding your risk profile. Includes what you can afford to risk, risk ability, time horizon and what you are comfortable risking (risk tolerance).
•    Where are you starting from? What are your assets today? If needed, do you have ability to change your expenses or save more?

Constructing Your Plan

Income Buckets

•    Determine how to divide up your assets into three buckets; Bucket #1 to create a guaranteed income stream; Bucket #2 to generate income and Bucket #3 to assure there is money in the future.
•    Set up a guaranteed stream of income to cover your basic expenses and keep a cash cushion in Bucket #1.
•    Identify the income generating investments to be placed in Bucket #2 to keep Bucket #1 topped up.
•    The investments in Bucket #2 can also cover discretionary expenses such as travel, hobbies, family and charities.
•    Choose the growth investments for Bucket #3. These assets grow to assure you will be able to keep ahead of inflation and fund your future for many years. They are sold when the market is up to replenish Bucket #2.
•    Your portfolio is designed to minimize your investment risk while having a high probability of meeting your goals.
•    The plan is analyzed under several economic and market scenarios to let you know the shocks it can withstand.

Implementing Your Plan

We help you make any investment changes needed.  Periodically we rebalance the investments in each bucket and make adjustments as your situation and the markets change.

The benefits of having an income plan are knowing the amount of income that is available and having a disciplined process to make changes, if needed.  This allows you peace of mind when it comes to your finances.  Contact us to start your plan.


Investing in a world of negative interest rates 

More than 25 percent of bonds are yielding less than zero percent. That means when the bonds mature, owners will receive less than they paid for them. This is a scary scenario for any bond investor as security of principal and low-risk returns are the main reasons to hold bonds.

Read the rest of the Bradenton Herald Article.

Reducing your income risk is crucial when investing

When investing and managing your money, you must consider and deal with a number of potential risks.  Some of these are more important at different times in one’s life. If you are relying on your investments to provide income to pay your expenses, you are rightfully concerned about the stability of income.  Regardless of how you use the income, let’s look at how you can manage these risks and improve the reliability of your overall investment income.

Read the rest of the Bradenton Herald Article.

Why everyone needs to own bonds

Everyone should own bonds or bond-like investments, though you might ask why would anyone want to own bonds at this time? The value in owning bonds is not just for the known rate of income but also to provide a less-volatile rate of return and to provide stability to a portfolio. Providing stability and helping us deal with our instinctual desire to make the wrong moves at the wrong times may have the most value for investors.

Read the rest of the Bradenton Herald Article.