Retirement Plan Case Study

The information below is just one example of a typical "before and after" scenario we can create for our clients.  While everyone's situation is unique, there are some common areas where we can usually help clients improve their position.  

Assumptions are; Married couple, early 60’s, no pension, no debt.  Income is mostly from Social Security and qualified retirement funds. Clients aren't concerned about leaving a legacy to their children.  We assumed a 5% rate of return in retirement and a 2.5% inflation rate.  We also assumed that the market went down significantly in the years just before and after retirement.     

Total Percent of Portfolio Subject to Management Fees      100%23%
Total Percent of Fees Charged Annually                                 2.5+%1.50%
Personal Risk Number (0-99, 99=highest risk)       n/a30
Portfolio Risk Number (0-99, 99=highest risk)            5531
Percent Of Potential Market Crash Portfolio Loss      34%9%
Projected Retirement Age6969
Income Stability Ratio (% of secure income)54%90%
Percent Increase in Lifetime Retirement Income (to age 95)   0%40%
Percent Of Portfolio Leftover at Death (at age 95)0%17%
Age at Which Money Runs Out                                  Age 86Never

At first glance, you might wonder why this client received more secure lifetime retirement income with far less risk and management fees.  As counter-intuitive as this may seem, it’s not unlike many other situations we all experience in life.  The following example may explain this:

I enjoy (sometimes!) playing golf.  In my early days of learning to play this crazy game, I thought that swinging the club as hard as I could would make the ball go farther.  It wasn’t until I had lessons from a trained professional with the proper expertise that I finally learned this was not the case.  Although initially hard to accept at the time, I eventually came to understand that golf is all about strategy, patience, and skill. Hitting the ball far requires a slow, deliberate, and measured swing instead of always trying to kill the ball.  And guess what?  This same principle applies also to creating a winning retirement planning strategy. For over 30+ years, I’ve successfully used this counter-intuitive thinking in my client’s retirement plans and it really works - - - every time.

If you would like to see how your numbers compare in the above “before and after” example, just call our office at 760-752-7848, email us here, or click on this calendar link to schedule a 10-15 minute "Get Acquainted" phone call so we can find out a little more about your situation and see how we might best be of service to you.

Securities investing involves risk, including the potential for loss of principal.  There is no guarantee that any investment plan or strategy will be successful.  Past performance is no predictor of future results.  Results may vary.  Assumptions used in this example are not guaranteed. Guarantees backed by the claims paying ability of highly rated life insurance companies.