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Retiring without sufficient assets to maintain a minimally acceptable lifestyle (which each person defines in their unique way) is an unthinkable outcome. That’s why, when investors are planning for retirement, the most important question is usually something like: How much can I plan on withdrawing from my portfolio without having a significant chance of outliving my savings?
The answer is generally expressed in terms of what is referred to as a safe withdrawal rate—the percentage of the portfolio you can withdraw the first year, with future withdrawals adjusted for inflation.
A Simulation Solution
While historical returns can provide insights, it’s critical that investors not make the mistake of simply projecting the past into the future. Current valuation metrics > SEE MORE
A common axiom is that those who fail to plan, plan to fail. And while most people would never start a business without a business plan, many investors manage their money without an investment plan that identifies their ability, willingness and need to take risk, sets goals (such as the rate of return they require their portfolio to generate), and includes an asset allocation and rebalancing table to provide discipline.
Compounding the problem of a failure to plan is that even a well-thought-out investment plan is only a necessary condition for > SEE MORE
While on vacation recently in the Abaco Islands, on the outer rim of the Bahamas, I found myself on an important mission: taking the golf cart to the local market to restock our dwindling supply of the necessary ingredients for piña coladas.
I was stopped in my tracks en route by a welcome sign announcing a new resident’s beachside home. It read: “Someday Came.”
The obvious implication is that these folks decided to act on their “Yeah, I’m gonna do that someday” daydreams.
But it raises many questions, right?
Who are these people? What’s their story, financial and otherwise? Did they hammer this sign into the sand after scrimping and saving, finally realizing their retirement dream > SEE MORE
One of the most important estate-planning decisions for investors is how to properly designate beneficiaries of their retirement accounts. In most scenarios, the logical choice is to designate individuals as beneficiaries — as opposed to the estate — to allow for the IRAs, once inherited, to “stretch” the distributions for as long as possible. The longer the IRA is sheltered from taxes, the more potential it has to grow and accumulate wealth. Naming an individual is a simple and strategic method to stretch an IRA. However, the real world is not always simple, and there are often other factors to consider when determining beneficiaries.
Manisha Thakor brings the BAM Alliance’s Steve Weiss on the MoneyZen Podcast to discuss some of the ins and outs of Social Security, including strategies for claiming benefits and optimizing them to fit your life and financial situation.
As the Director of Wealth Strategies for Women at the BAM ALLIANCE, Manisha is an ardent advocate of financial literacy for women. She is passionate about providing the financial wisdom that women and families need to redefine their relationship with money, helping them create lives aligned with their values and goals through a program of integrated, holistic financial life planning and evidence-based investment management.
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The opinions expressed by featured authors are their own and may not accurately reflect those of Beacon Hill Private Wealth LLC or the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.
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