Thanks to advances in medical technology, folks are generally living longer. This is great news. But it also doubles as an action item for investors, because the longer you live, the more you’ll need saved to provide for your spending needs in retirement. The question then becomes, what is the best way to calculate your life expectancy so you can plan retirement accordingly? When Planning for Retirement, Use a Conservative Estimate for Life Expectancy Everyone can likely agree that when it comes to retirement planning, it’s better to have saved too much than too little. By making a conservative estimate of you and your spouse’s life expectancies, you encourage yourself to save more and invest for longer, so that you can secure your income and spending needs throughout a long retirement. It’s a smart approach. [+] Read More

When thinking about retirement income planning at a high level, it boils down to two main considerations: what are your retirement income sources, and what are your retirement income needs? Answering these questions is an important first step towards creating your retirement income strategy. What are Your Retirement Income Sources? We’ve written before about potential strategies to maximize social security payments, which can help to provide a supplemental boost to your retirement income. But for many investors, a main source of retirement income comes from their investment portfolios. Dividend paying stocks, dividend focused portfolio strategies, fixed income allocations, or selling stocks/portfolio holdings to raise cash are all ways investors can generate income in their investment portfolio. [+] Read More

It’s important to ensure you are getting appropriate value for the financial advisor fees you pay. Ultimately, money spent on financial advice should lead to more informed decisions about how to structure investment accounts, how to allocate your portfolio, what investments make sense and what steps need to be taken to reach your financial goals. In order to justify the cost of a financial advisor, we believe investors should expect these four things in return: 1) Sound Financial Advice There is a wide range of information your financial advisor should be able to provide you, including how to structure your accounts, deciding which accounts to use for income, assisting with important financial decisions and events, and helping with your estate plan. It helps if your financial advisor is a Certified Financial Planner (CFP)—they should be able to offer advice pertaining to more areas than a normal financial advisor, including insurance and tax planning.1 [+] Read More

In a previous post, we examined various investment products and the potential investment fees associated with each. Many of those investment products—like mutual funds and annuities—may have fairly complicated fee structures. In some cases, it may be difficult to ascertain what the investment products actually cost you. We believe there is a potentially better solution for high net worth investors when it comes to investing and understanding the investment fees you’re paying. How Investment Fees Work in Separately Managed Accounts A separately managed account is one in which you give a money manager or financial advisor discretion over what investments to make on your behalf. The financial advisor or money manager may purchase individual stocks, bonds, ETFs, mutual funds, and so forth. Typically, separately managed account fees are a percentage of your assets under management which are deducted or paid every quarter. There are often no commission charges for trades, and the fees are often easier to understand than many other investments out there. [+] Read More

How much you’re paying in investment fees can depend on what type of investments you own and the services offered by your financial advisor. Below, we’ll break down some of the more common investments and offer you tips on how to calculate the fees you’re paying. Mutual Funds The annual fees for investing in mutual funds are known as a fund’s “expense ratio.” These are calculated by dividing the fund’s operating expenses by the average dollar value of its assets under management. Operating expenses are taken out of a fund's assets and lower the return to a fund's investors.1 There can also be other fees associated with mutual funds, such as those incurred through investor purchases, mutual fund exchanges and redemptions, investment advisory fees, marketing and distribution expenses (also known as 12b-1 fees), brokerage fees, and custodial, transfer agency, legal, and accountant’s fees.2 [+] Read More

An investment plan, amongst other things, can help you establish where you stand financially, how you should invest, and how and from where you should generate retirement income. But it can go further than that. An investment plan can help establish what your family’s income needs are, and help you ensure they are provided for. 3 Estate Planning Features of an Investment Plan An investment plan can help you do the following: 1) Map Out Your and Your Spouse’s Retirement Income Needs By establishing your spending needs in retirement as well as your spouses, and inputting them into an investment plan, you can keep track of how your assets stack up against your long-term income needs. [+] Read More

Two common questions investors ask themselves at the beginning of any year are: What is the stock market going to do this year? And, how should I position my portfolio as a result? To provide some insight as to what may be in store for the year, we’ve taken a look at what seven of the biggest financial institutions in the world are predicting for 2014. As you read through these, it’s important to keep in mind that your portfolio’s allocation should be based on more than just a forecast—you also need to consider your long-term goals, cash flow needs, risk tolerance, and other factors related to your investment plan. How Will the S&P 500 Perform in 2014? Morgan Stanley - S&P 500 +9%1 Morgan Stanley equity strategist Dr. Adam S. Parker thinks the S&P 500 is set to rise 9% in 2014. Morgan Stanley’s strategy recommendations are to favor small cap stocks versus large cap, and at a sector level they prefer health care to consumer staples, technology to consumer discretionary, and chemicals to industrials and energy. Within financials, they like capital-market-sensitive banks and asset managers over insurers and regional banks. [+] Read More

April 15 is fast approaching and the W-2s, 1099s, and other tax documents are starting to appear in your mailbox - it’s almost time to file. What’s more, with Congress having passed some tax law changes in 2013 - higher top marginal income tax rate (39.6%), higher capital gains rate (20%) for top earners, etc1… - there’s a possibility that your tax bill has increased from 2012. With that in mind, it could make sense to start preparing your taxes early in the event you might owe a bit more than you think. This way you’ll have additional time to decide how you want to pay. We hope the information below will help make the tax preparation experience a little better by reminding investors of a few ways they may be able to reduce their taxable income for 2013, while also offering a few pointers for thoughtful tax planning in 2014. Ways to Potentially Reduce Taxable Income for 2013 It’s too late to make tax deductible contributions to 401(k) plans or other employer-sponsored plans for the 2013 tax year. But, you might still have some alternatives—if you meet some eligibility requirements, you could potentially make a tax deductible contribution to a Traditional IRA, a SEP IRA, or a Health Savings Account, which would reduce the taxable income that you would report for the year. [+] Read More

Creating an estate plan involves a lot of thought and time, and in some cases may cost a bit of money. But don’t let that discourage you from establishing a comprehensive estate plan as part of your overall investment approach. The time and effort spent creating an estate plan can often mean less time and stress for your family down the road. To help you get started, we’ve outlined six estate planning tips we think are important to any estate plan. A good idea would be to go through a few of these steps on your own to accomplish the basics of estate planning, then loop in your financial advisor and/or estate planner to help you solidify it with the necessary investment accounts and legal documents. 1) List the Valuable Assets in Your Estate Generally, you want to run an inventory of all of your assets that have value greater than $100 or so. Of course you want to include your home, investment accounts, bank accounts, insurance policies and so forth, but you also want to get granular with your assets and include things like jewelry, collectibles, electronic equipment, etc… You can then go through this list and decide how you want these assets distributed as part of your estate plan.1 [+] Read More