Fundamentals of Investing for Retirement Income. Organizing Your Portfolio

Transcription

1 amentals of Investing for Retirement Income Organizing Your Portfolio

2 Mike Miles Founder and Principal Advisor, Variplan, LLC Certified Financial Planner Registered Investment Advisor SEA Benefit Provider Since 1999 Federal Times Money Matters Columnist Ask the Experts Panelist at

3 amentals of Investing for Retirement Income 1. Success and Failure in Retirement Investing 2. Defining Retirement Resources, Goals and Constraints 3. Understanding Investment Risk and Return 4. How Diversification Really Works 5. Asset Classes and Types Diversification and Concentration 6. Understanding Asset Allocation and Hedging 7. Setting Investment Performance Expectations 8. Managing Investment Costs 9. The Case for Index Investing 10. Accounting for Inflation in Retirement Planning 11. Managing Portfolio Liquidity 12. Organizing Your Portfolio

4 SEA Member Benefits Free Hour of Consulting / Analysis $250 Vantage Discount Questions to me at mmiles@variplan.com

5 Lesson 11 Review Managing Portfolio Liquidity

6 Portfolio Liquidity Can be readily and predictably converted to spendable cash

7 Basic Portfolio Structure Taxable Tax Deferred Tax Exempt Checking Savings Brokerage Def Annuity TSP 401k 403b Roth TSP

8 Cash Reserves Taxable Tax Deferred Tax Exempt Cash Reserve Invested Invested Invested

9 Withdrawals for Spending 1 Taxable Tax Deferred Tax Exempt Cash Reserve Invested Invested Invested

10 Order of Withdrawal Withdraw from least costly sources first.

11 Replenishing the Cash Reserve 1 Taxable Tax Deferred Tax Exempt 2 Cash Reserve Invested Invested Invested

12 Replenishing the Cash Reserve 1 Taxable Tax Deferred Tax Exempt 2 Cash Reserve Invested Invested Invested 3

13 Replenishing the Cash Reserve 1 Taxable Tax Deferred Tax Exempt 2 Cash Reserve 4 Invested Invested Invested

14 Rebalancing Taxable Tax Deferred Tax Exempt Cash Reserve Re-fund Rebalance

15 Rebalancing Cash Reserve Balance Cash Reserve Target Excess / (Need) $30,000 - $50,000 ($20,000)

16 Rebalancing Total Portfolio Value Cash Reserve Target Investment Portfolio $500,000 - $50,000 $450,000

17 Rebalancing Asset Allocation Target Balance Difference Stocks 60% $270,000 $282,000 $12,000 Bonds 37% $166,500 $174,000 $7,500 Cash 3% $13,500 $14,000 $500 Total $450,000 $470,000 $20,000

18 Rebalancing Asset Allocation Target Balance Difference Stocks 60% $270,000 $282,000 $12,000 Bonds 37% $166,500 $174,000 $7,500 Cash 3% $13,500 $14,000 $500 Total $450,000 $470,000 $20,000 To the Cash Reserve

19 Lesson 12 Organizing Your Portfolio

20 Financial Planning and Management Goals Resources Management Performance Success Wants Needs Guaranteed Annuities Insurance At Risk Liquid Assets Cash Marketable Securities Illiquid Assets Real Estate Business Interests Action Constraints Decisions Analysis Assumptions Experience Probabilities Estimates Risk Return Cash Flow Wealth Inflation & Taxes

21 Portfolio Structure Tax Deferred Taxable Tax Exempt

22 Check Check Portfolio Structure Tax Deferred Taxable 401k Save Save Broker TSP Tax Exempt Roth TSP

23 Objective Minimize the Number of Accounts Easier to Analyze Easier to Rebalancing Easier to Understand and Monitor Fewer Trades Lower Costs

24 Check Check Portfolio Organization Tax Deferred Taxable 401k Save Save Broker TSP Tax Exempt Roth TSP

25 Portfolio Organization Tax Deferred Taxable Check Save Save 401k Broker TSP Tax Exempt Roth TSP

26 Portfolio Organization Tax Deferred Taxable Check Save Save 401k Broker TSP Tax Exempt Roth TSP

27 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

28 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

29 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

30 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

31 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

32 Portfolio Organization Tax Deferred Taxable 401k Check Save Broker TSP Tax Exempt Roth TSP

33 Portfolio Organization Tax Deferred Taxable Check Save Broker TSP Tax Exempt Roth TSP

34 Portfolio Organization Tax Deferred Taxable Check Save Broker TSP Tax Exempt Roth TSP

35 Portfolio Organization Tax Deferred Taxable Check Save Broker TSP Tax Exempt Roth TSP

36 Portfolio Organization Tax Deferred Taxable LIQUID CASH RESERVES INVESTED Tax Exempt INVESTED

37 Distributing Asset Types Tax Deferred Taxable Check Save Brokerage Liquid Cash Stocks TSP Bonds Strategic Cash Tax Exempt Roth TSP

38 Course Summary 1. Success and Failure in Retirement Investing 2. Defining Retirement Resources, Goals and Constraints 3. Understanding Investment Risk and Return 4. How Diversification Really Works 5. Asset Classes and Types Diversification and Concentration 6. Understanding Asset Allocation and Hedging 7. Setting Investment Performance Expectations 8. Managing Investment Costs 9. The Case for Index Investing 10. Accounting for Inflation in Retirement Planning 11. Managing Portfolio Liquidity 12. Organizing Your Portfolio

39 Contact Me

40 Contact the SEA

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