Retirement Planning

Managing Sequence of Returns Risk

Managing Sequence of Returns Risk

A retirement calculator is a great tool for most investors. It lets you input a number of variables such as current age, planned retirement age, annual salary, annual savings, current retirement savings balance, and expected annual return and the calculator computes your estimated accumulated retirement account balance at retirement. Some calculators will even translate that lump-sum balance into an annual withdrawal amount. This is a straight-forward way to see if you are on track to meet your retirement goals and compare what you have with what you will need. If you don’t like your results, you can play with the inputs to determine what changes you should make.

Cost of Living Adjustments for 2019

Cost of Living Adjustments for 2019

It’s a new year and I can’t think of a better time to highlight cost of living adjustments affecting dollar limitations for retirement-related items and social security benefits for 2019.

 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan increased from $18,500 to $19,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the Federal government’s Thrift Savings Plan remains unchanged at $6,000.

Inflation Disparity

Inflation Disparity

Talk of inflation has heated up in the last few weeks, with fears that higher than expected inflation could cause the Federal Reserve to raise interest rates at a faster pace. This was one of the contributing factors to the recent volatility in the stock market and has driven U.S. Treasury yields higher.

The Benefits of a Total Return Approach to Retirement Spending

The Benefits of a Total Return Approach to Retirement Spending

Last year I wrote an article titled “The Shortcomings of Income Only Spending in Retirement,” which detailed the shortfalls of the popular strategy of spending only the income generated by a portfolio in retirement. In summary, the main drawback of income only spending is the tendency to increase portfolio risk when yields are low in order to generate more income.