Retirement & Distribution Planning
We believe that it is more important to prepare for the future, rather than attempt to figure it out later and hope for the best. With life expectencies increasing and health costs rising, many people spend as much as 30 years or more of their lifespan in retirement, many without a plan on how they will make their money last. So it is essential to prepare for these years, and put your investments to work using every available strategy to hedge the biggest risks of all, time and volatility. Inflation and the sequence of withdrawals can also cripple a retirement income plan. Investment platform and advisory fees are important to understand too. Lower fee arrangements are not necessarily better than higher cost structures. Typically, low fee investment strategies are passive investments that have very little internal risk management. Higher fee investment strategies tend to have increased levels of risk mitigation so finding an applicable balance of passive and active trading methodologies creates a blended fee that is reasonable relative to a risk tolerance for each client.
A major issue when planning for retirement is figuring out what the correct withdrawal rate should be for a given client. An academic approach to this topic is not necessarily correct for everyone as it is not an exact science because there are so many elements to consider. Many economists believe that a safe withdrawal rate in retirement is 5% or 4%. Modern theory suggest that number may be closer to 3% net of fees and taxes. That unfortunate reality means that we have to be creative to develop a personal retirement plan that incorporates a wide range of variables to attempt to account for that calculation.