Retirement Insights Tip #7: Effects of withdrawal rates and portfolio allocation
ONE SIZE DOES NOT FIT ALL Higher initial withdrawal rates or overly conservative portfolios can put your retirement at risk. But setting it too low can lead to sacrifices in retirement. You may want to consider a dynamic approach to spending. Setting an initial withdrawal rate and an appropriate portfolio allocation is necessary to sustain 30+ years of spending in retirement. The chart on the left illustrates the effects of different initial withdrawal rates assuming [...]
Video series: What’s the upside of risk?
In this short video, Nobel laureate Eugene Fama discusses how financial markets work, what fuels innovation, and the upside and downside of risk.
July Performance Dashboard
After a record June, U.S. equities continued to post gains, thanks to strong earnings and economic growth. Dovish sentiment from the Fed was short-circuited on the final trading day of the month. Despite a well-telegraphed 25 bps reduction in the target federal funds rate, the trajectory for future rate cuts remains uncertain. Large, mid and small-caps gained, with the S&P 500®, S&P MidCap 400® and S&P SmallCap 600® all up 1%. Enhanced Value was the top performing [...]
Retirement Insights Tip #6 – Changes in Spending
Spending habits change over time. Typically, spending peaks at the age of 45 and starts a slow decline. This is an important piece of the retirement planning puzzle. We often talk about distribution strategies at retirement age. A solid estimate of spending is necessary to strategize for your future. This chart illustrates what college-educated households spend on major expenditures at specific ages. Most Americans’ peak spending years are between ages 45 and 54, and thereafter [...]
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Video series: Why Should I Invest?
In this first short video, Nobel laureate Eugene Fama explains two key steps to investing: knowing why you want to invest and understanding your tolerance for risk. Everyone has different reasons for investing and different risk aversions. Stay tuned for our 3 part series on risk, rewards and markets.
Retirement Insights Tip #5: The Power of Tax Deferred Compounding
Deferring the tax on investment earnings, such as dividends, interest or capital gains, may help accumulate more after-tax wealth over time than earning the same return in a taxable account. This is known as tax-deferred compounding. This chart shows an initial $100,000 after-tax investment in either a taxable or tax-deferred account that earns a 6% return (assumed to be subject to ordinary income taxes). Assuming an income tax rate of 24%, the value of the [...]
