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Reinventing Retirement Blog


Caution: Robo-Advisor Ahead

07

Nov 2014

Caution: Robo-Advisor Ahead

Considering how much risk (a lot) is required for a given return (a little), there may be better investment opportunities available. This is especially important for clients in retirement – where risk management is paramount to investment return.


Your Weapon Against Herd Behavior

31

Oct 2014

Your Weapon Against Herd Behavior

Imagine wandering around your favorite department store. There is a massive sale – with many products being sold below cost! The deals are so good, that you wonder if the merchandise is any good. “Perhaps,” you think to yourself, “they must be knock-offs. “Or,” you think to yourself, “the products are defective.” You continue to pace around the store, watching the items get snatched off the shelf – for what is a screaming deal. After many items are sold at ridiculous bargain prices, the sale ends. The sale tags come off. All the prices go up. Relaxed that prices are back to normal, you decide, “Now is the time to buy!”


Pension Risk: Is Your Pension Safe?

15

Oct 2014

Pension Risk: Is Your Pension Safe?

In a previous post, we discussed three distribution options available to pensioners.  That is, how will you receive the money offered by your pension? While there are multiple ways a pension fund can pay out benefits, we discussed three of the most common options in our previous article: In a one-time, lump-sum distribution Via monthly payments for the rest of your life (annuitization) Via monthly…

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Don’t Lose Sight of the Big Picture: Total Return Investing

08

Oct 2014

Don’t Lose Sight of the Big Picture: Total Return Investing

You want to know how much money your investment is generating, right? This knowledge can help you determine if the investment makes sense for you. That is, should you give it the boot, or hold it forever? To figure out the return of any investment, you need to make sure that you’re looking at both ways an investment generates money . . .


Fee-Only Financial Planners are Fiduciaries

25

Sep 2014

Fee-Only Financial Planners are Fiduciaries

In the fiduciary model, the financial advisor is legally obligated to act in the client’s best interest. This legal obligation requires the fee-only financial planner to work for the client – and not for themselves. This begs this questions, “Why are brokers and other sales people allowed to push their products under the guise of providing financial advice?” and “How can this be legal?”


A Primer on Private Equity

19

Sep 2014

A Primer on Private Equity

You may already be invested in private equity; large pension plans are very keen on private equity investments. If you have a pension with CalSTRS or CalPERS, or the University of California, you very likely own some private equity investments . . .


Fee-Only Financial Planning

10

Sep 2014

Fee-Only Financial Planning

Our opinion that fee-only financial planning is terrific is biased. So, you do not have to take our word for it. Financial journalist Jane Bryant Quinn, consumer expert Clark Howard, personal financial guru Suze Orman, and non-profit organization Consumer Reports are all in agreement about the value of electing a fee-only financial planner, saying that . . .


What to Look for in a Disability Policy, Part II

04

Aug 2014

What to Look for in a Disability Policy, Part II

“You want to be confident that they will still be in business when, and if, you need to file a claim,” says Nancy McCready, CFP® of the Certified Financial Planner Board of Standards, Inc. (CFP Board). You can check up on this via the rating agencies, such as A.M. Best, which dole out grades to insurance companies. The grades measure a company’s ability to pay an insurance claim. A lower letter grade – i.e. “F” – means . . .


What to Look For in a Disability Policy, Part I

21

Jul 2014

What to Look For in a Disability Policy, Part I

The Social Security Administrations reports:

…over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67.

Those are some pretty rough odds! Given the risk, a disability policy can be a useful tool for protecting one’s income stream. If you decide to insure your future income by electing disability insurance, consider these four facets when selecting your policy.


The Fourth Challenge of Private Equity

14

Jul 2014

The Fourth Challenge of Private Equity

Private Equity is a type of investment. Private Equity investments are those investments in companies that are not publicly-traded. (Publicly-traded entities are those whose shares of ownership are available on a public exchange. Apple Inc. (ticker: AAPL) is an example of a publicly-traded company, traded on NASDAQ.)

Private Equity investors usually make their money once a company goes public – once the formerly private company launches its initial public offering (IPO). Facebook (ticker: FB) and Twitter (ticker: TWTR) are examples of recent IPOs.


The Three Boxes

09

Jun 2014

The Three Boxes

It is important to understand your cash flow; you want to know where your money is going. For the purposes of financial planning, categorize expenses into boxes A, B, and C. This process serves as a tool to help manage spending and saving patterns.


Taxes on Five Types of Investment Income

04

Jun 2014

Taxes on Five Types of Investment Income

Different types of investment returns are taxed distinctly. Knowing how investment returns are taxed can help you better manage your investments. For an explanation of short term capital gains, imagine Bob: Bob buys shares of Apple Inc. Bob’s timing is good, as the share price of Apple shoots up in the following 11 months. With a tidy gain in hand, Bob sells the stock –…

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The Two Pros & Two Cons of Short-Term Investments

27

May 2014

The Two Pros & Two Cons of Short-Term Investments

Given current market valuations and the pending interest rate movement, many investors are drawn to short-term investments. Fortunately for those looking to invest for the short-term, there are multiple options available for short-term investing: Treasury Bills Short-Term Bond Funds Money Market funds Savings Accounts Short-Term Certificates of Deposits (CD) Before choosing one or more of the above, consider the pros and cons of short-term investments….

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Retiree’s – Is Your Money Safe at the Bank?

22

May 2014

Retiree’s – Is Your Money Safe at the Bank?

According to a survey by the Society of Actuaries, one of retiree’s biggest fears are investment losses. According to their study, 56% of retiree’s are “apprehensive that their investments will lose value in retirement.” This begs the question: is your money safe at the bank? Of course it is, assuming that the bank is solvent. And even if the bank runs into financial trouble, the…

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The Two Rules of Retirement

18

May 2014

The Two Rules of Retirement

Enjoying retirement requires following just two simple rules. This sounds too easy – one would imagine that a successful retirement is more complicated. It is complicated! This is because while the rules themselves are simple, following these simple rules is not simple. Read on – and you will learn that managing these two rules simultaneously can actually be quite a challenge. You don’t need a…

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Do I Have Enough Money to Retire?

11

May 2014

Do I Have Enough Money to Retire?

You have seen the commercials: people carrying their nest eggs, or their money board, indicating the hypothetical dollar amount required for retirement. Seeing these advertisements may have prompted some introspection on your part. You may be thinking: When can I retire? Less hopeful, you may be thinking: Can I retire? So, what happens if you haven’t saved enough for retirement? Are you fated for an…

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