An investment plan can serve as a tool to help you create a calculated and dynamic retirement income strategy. Calculated because it takes into account important financial aspects of your life like cash flow needs, investment horizon, and risk tolerance. Dynamic because it can be adjusted as your family and financial needs change. Retirement Income Needs Shape Your Investment Plan Let’s say you are 65, in good health, and have $1,000,000 saved with a long-term goal of growth because you want to pass along assets to heirs. You’ll also need $1,000 of monthly income from the portfolio starting at age 70, to supplement Social Security retirement benefits. [+] Read More

Make room for more baby boomers in the workplace. From 1989 to 2012, the percent of people over age 65 in the workforce jumped from a little under 12% to 18.5%, setting a trend that’s set to continue. Between 2010 and 2020, the number of workers age 65 to 74 is expected to grow at a faster pace than any other demographic. The sheer quantity of baby boomers entering the workforce accounts for some of this growth, but it’s also being driven by cultural forces—many baby boomers really enjoy working and staying busy.1 As Wealth Managers we focus on investors’ retirement goals and the ability to meet those goals. Would your retirement goals be compromised if you weren’t able to work past a certain age? Is there a backup plan? [+] Read More

The world’s largest asset manager, BlackRock,1 conducted a survey of 17,600 investors around the globe to uncover investor perspectives on retirement. BlackRock found that nearly half of respondents had a negative outlook on their financial futures, in large part because they were unsure if their retirement savings would outlast their retirement expenses.2 Do you feel this way too? Retirement is supposed to be enjoyed, not feared, and a solid investment plan can help wipe away those concerns. As a starting point, investors can think about ways to reduce retirement expenses to help allay concerns about having sufficient retirement savings. Here are three ideas to explore. [+] Read More

One of the distinguishing features of the Great Depression was marked deflation from 1930 – 1932, with prices falling precipitously (-30%) over that time.1 Deflation spiraled, and the stock market and investor portfolios tumbled with it. With recent headlines citing deflation as a concern, we’re taking a moment to remind investors about the negative effects of deflation, its present-day risk in the global economy, and what steps investors concerned about deflation can take in their portfolios. What is Deflation and How Does it Affect the Economy? Deflation occurs when prices of goods fall on a broad scale, usually due to sharp declines of money in circulation or because of a big spike in the supply of goods with little supporting demand.2 The key phrase here is “broad scale.” The prices of flat screen TVs might fall year-over-year, for instance, but that’s more likely because of productivity gains and innovation within that sliver of consumer goods than it is a broad-scale economic issue. [+] Read More

The 2008 financial crisis left many investors cautious about investing in stocks, and rightfully so. The thought of experiencing steep market declines is a recipe for losing sleep at night, and no investor wants that type of feeling about their portfolio. Investing with caution is understandable, but it’s to the point that many investors could be inadvertently hurting their retirement by choosing to remain in cash and other short term investments instead of putting their money to work. The Opportunity Cost of Waiting in Cash A recent survey by BlackRock found that nearly half of investor’s portfolios are in cash, with a relatively small proportion dedicated to longer-term investments like stocks. What’s more, half of those investors said they intend to keep that cash in their portfolios for the next 12 months, and 36% of investors said they plan on increasing their cash holdings over the course of the year.1 [+] Read More

The uncertainty surrounding the current interest rate environment has many investors rethinking their retirement income strategy. Some are considering dividend income as a way to generate additional cash for their income needs. Below are four dividend money manager strategies that invest in dividend paying stocks as a means to provide income for portfolios, while also offering the potential for equity-like returns over time. As always, we encourage investors to discuss these dividend money managers with your financial advisor before investing. (WrapManager is not affiliated with the money managers listed and has not approved for use nor entered into contracts with all of the managers. This is for informational and comparison purposes only.) [+] Read More

Many investors choose to sell shares of stocks in their portfolios every month, or perhaps every quarter, to raise the cash they need for retirement income. This isn’t necessarily a good or a bad method for generating retirement income, but there are three things investors should consider when taking this approach. 1) Tax Implications of Selling Stocks Investors should be mindful of realizing capital gains in their portfolios due to selling stocks. If the shares are being sold at a gain, it could mean having to foot a sizable tax bill the following year. These gains might be offset by selling stocks at a loss in the same year, but some investors may not have a lot of positions that carry a big loss—meaning you’ll be stuck with the tax bill. The current capital gains rate for investors filing jointly and making less than $457,600 is 15%, while anything above that threshold is taxed at 20%.1 [+] Read More

Many investors need to own fixed income in their portfolios to provide income and reduce volatility. But what percentage of fixed income is the ideal amount? Research conducted by BlackRock suggests that the optimal allocation to bonds actually fluctuates widely over time. Since 1900, the average optimal allocation to bonds as shown in the chart has been about 43%. But as you can see below, there were long periods when owning more bonds made sense (when the blue line is above the overall average), as well as stretches where owning much less than 43% in fixed income was considered optimal, like in the 60’s, 70’s and 80’s.1 Average Optimal Allocation to Bonds 10-Year Periods, Using 1900-2010 Annual Data, Cross-Country Averages (Click chart for larger version) Source: BlackRock [+] Read More

Investors wanting to add an international (non-US) component to their portfolios should look to international money manager WHV Investments’ International Equity strategy as a viable option. The WHV International Equity strategy invests primarily in large-cap international growth stocks, with a belief that the most attractive global economic sectors can generate superior investment performance.1 As a performance benchmark, the strategy uses the MSCI EAFE Index, which represents developed markets in Europe, Australasia, and the Far East.2 To request detailed performance information on the strategy or to compare the performance of the WHV International Equity Strategy to other international strategies, please call one of our Wealth Managers at 1-800-541-7774. Alternatively, you can request the information here. [+] Read More