Wealth accumulation is like climbing to the top of Mt. Everest.  Creating a predictable, sustainable, lifetime retirement income is analogous to safely getting back down to the bottom.  You don’t want to run out of supplies halfway back down or run out of money during your lifetime. At SPM, we take great care to help you make the very best decisions regarding the wealth utilization phase of your life.  We start by challenging you to answer reflective questions such as the ones below:

1. How much will I need in retirement to meet my desired lifestyle?
2. Where should I invest now?
3. How much will inflation affect my retirement income and lifestyle throughout my life?
4. What’s the best way to take money out of my retirement accounts?
5. What’s my best asset mix going forward?
6. What is the best way to balance the growth, safety, liquidity, taxes, cost, diversification and income requirements of my retirement portfolio?
7. What income withdrawal rate and techniques will help me not outlive my money?
8. How will I pay for health-care expenses?
9. Is a Long-Term Care stand-alone insurance policy the best way to address a potential LTC need or is a life insurance & LTC combined policy the better way to go?

The retirement landscape has changed and your SPM Wealth Advisor will help you better understand how the resulting changes can impact your future and your current financial decisions.

• Longer life expectancies, future inflation rates, and retirement spending habits must be accounted for in distribution plan modeling.
• While historic average returns may be a valuable starting point for modeling in the accumulation phase, distribution modeling is complicated by cash outflows.
• The central concern in the distribution phase is shortfall risk, or outliving one’s assets, so investors and advisors must develop a sound distribution strategy.
• The new math of the distribution phase emphasizes the importance of downside risk management and the sequence of investment returns — particularly in the initial years of withdrawals.
• Standard deviations and calendar-year returns are incomplete measures of downside protection.
• Both qualitative and quantitative analysis is needed in order to gain insight into the character of an investment manager.
• True risk controls are a byproduct of company philosophy and process.

Creating sustainable retirement income portfolios is both an art and a science. Multiple uncertainties and assumptions complicate the task, as individual investors must balance portfolio stability and growth in order to meet future liabilities. Furthermore, portfolio withdrawals amplify the impact of market declines in the distribution phase. The shift from the accumulation to the distribution phase of investing requires new thinking about risk and risk metrics.