Rising annual health care costs in retirement
Health care is traditionally one of the largest expenses in retirement. Planning for these costs, and keeping up with it as you age is crucial. Given variation in health care cost inflation from year to year, it may be prudent to assume an annual health care inflation rate of 6.5% which may require growth as well as current income from your retirement portfolio. This chart illustrates the current out-of-pocket health care costs experienced by today’s [...]
Video Series: Reacting to Markets
This 1 minute video says it all! Nobel laureate Eugene Fama provides perspective for long-term investors on why they shouldn’t pay a lot of attention to short-term results. "If you have a bad period in the risky part of your portfolio and you get out as a consequence...What that says is you NEVER should have been there!" The most free way of thinking about investing is understanding what the possibilities are...good or bad.
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 [...]
