Articles on Wealth Management Topics

If recent conversations with clients are any indication, a primary worry out there is how to plan for, or guard against, the "inevitability" of higher interest rates, a.k.a. falling bond prices. Most of these discussions arise from genuine concerns about the future performance of fixed-income investments given this backdrop. Some arise from a touch of performance-chasing, i.e. "Stocks have done so well in the last few years, so why not allocate more of our portfolio to them at the expense of our bond allocation, which has been languishing?".

Almost half of retirees take Social Security at age 62, the earliest possible age you can sign up for these benefits. And the vast majority of retirees request benefits before their full retirement age. While the decision of when to file for Social Security benefits must be based on individual circumstances, I would argue that many retirees would be better served to wait longer to access this lifetime, inflation-adjusted stream of income.

Your ability to successfully fund your retirement and to finance your other financial objectives is dependent on your net worth, i.e. your assets less your liabilities. So whenever you have excess cash flow, whether as a result of a one-time windfall like an inheritance or simply by virtue of your income exceeding your expenses on an ongoing basis, a conscious decision should be made whether to invest/save on the one hand or to reduce debt on the other.

There was a lot of hoopla when the rules were changed a few years ago to allow any taxpayer, regardless of income level, to convert IRA's and retirement plans to Roth accounts. So much so that you would think Roth conversions were "no-brainer" decisions. But in reality, a Roth conversion probably only makes sense for a small minority of investors. Here are some of the major factors to consider in deciding whether to convert your IRA or retirement plan account to a Roth IRA.

Clients who've endured conversations with me about their recommended asset allocation know how much I stress the importance of their investment time horizon. During a recent discussion about investment ideas, my dad suggested "What's your time horizon?" be my epitaph. Maybe so, but considering in advance when you will need the money you're investing can keep you from making the worst kinds of financial mistakes. And keeping your investment horizon in mind during periods of market turbulence should help keep you on course for attaining your financial goals.

To pick up where we left off in our last blog post on the role of annuities in a retirement portfolio, immediate annuities can serve a useful function. But like any other financial product, there are cost-effective, well-engineered annuities and expensive, poorly-designed ones. Here are some welcome and interesting annuity features that you may be unaware of if your only prior experience with annuities is through an insurance salesperson:

If there's one investment vehicle that causes more controversy than any other, it has to be the annuity. Opinions among financial professionals are usually divided along the lines of compensation model. Commission-based brokers and insurance salespeople tend to think more highly of them, and to recommend them more frequently, than Fee-Only financial planners.

If there is a Rodney Dangerfield of investments, it has to be Treasury Bonds. They always yield less than other taxable fixed-income investments with the same maturity, they don't get the airtime afforded stocks, and they don't have the mysterious allure of alternative investments. But in times of crisis, when other investments are withering under the pressure, Treasury Bonds usually step into the breach to provide a diversified portfolio with capital gains when they're needed most.