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Investment Manangement/Retirement Planning

Accumulation

Retirement planning involves evaluating your current financial standing and creating an accumulation strategy that will help to ensure a desired retirement lifestyle. Because an individual’s retirement years can span decades, retirement planning generally dominates other financial goals. A successful plan put into place during the wealth-building lifespan should address ways to maximize growth and tax-efficient distributions, as well as how to leave retirement assets to the next generation.

There are several ways to save for retirement:

  • Qualified employer-sponsored plans
  • Individual retirement accounts (IRAs)
  • Personal savings
  • Executive deferral plans

 

Distribution

You may find that qualified plans, IRAs, and Social Security won’t provide enough money to support your desired retirement lifestyle. By identifying your retirement gap, you can develop a strategy for personal savings invested outside of the traditional retirement vehicle.

At the heart of any retirement plan is the distribution of accumulated assets. The correct distribution method will help to ensure that your retirement savings last beyond your lifetime with minimum shrinkage from taxes. From premature distribution options that allow access to retirement assets prior to age 59½, to products intended to provide stable monthly payments for retirement, distribution planning is paramount to a successful retirement plan due to the risk of sequence of returns.

 

Sequence of returns risk

Sequence of returns can significantly impact your retirement income during the distribution phase. The risk of receiving lower or negative returns while taking withdrawals early in retirement is known as sequence of return risk. If you are taking withdrawals from your portfolio, the order or the sequence of investment returns can significantly impact your portfolios overall value which could result in lower income for retirees. Sequence of return risk is real and need to be planned for as early as possible in the financial planning process.