Steve's Investing Insights
Real Life Investment Strategies #5: Retirement Decumulation Strategies
Steps to Retire the Way You Want: Set Your Retirement Goals, Put Your Money in the Right Places, and Optimize Your Withdrawals
Most of us feel young well into our 60s (or even later) and retirement seems like a far away concern for the distant future. However, thinking about your retirement early allows you to comfortably enjoy your later years no matter what your priorities are – leaving a legacy for your loved ones, travelling, spending time on hobbies close to home or any combination. Putting together a retirement income plan early gives you the best path to safeguard your financial freedom post-retirement.
Retirement income planning doesn’t mean constant worrying and going without today. It just means taking stock of where you are financially, where you want to be in the future, and setting up a plan to get there. That retirement plan could include setting up the right investment strategies now to allow you the flexibility you’ll need in the future to generate cashflow from the right places and pay the least amount of tax. It also could mean contributing regularly and consistently now so you don’t have to make up for lost ground in the future.
Let’s get into what retirement investment vehicles and strategies you have, how to think about your retirement priorities and goals, and how you can plan a decumulation strategy for the retirement you want and deserve…
Real Life Investment Strategies #4: Business Owners Should Leverage Their Corporation for Retirement Savings
When you’re immersed in running a business, thoughts of saving for retirement often take a backseat, Employees in the corporate world may rely on employer pensions, but as a business owner, the responsibility for your retirement falls squarely on your shoulders.
Starting your retirement planning early and consistently contributing allows you to benefit from compounding returns to steadily build your nest egg over time. Investing in your retirement can ensure you have the financial means to enjoy life post-retirement, whether it’s traveling, pursuing new passions, passing along a little financial freedom to family members, and more.
The best advice I can give you is to step back and view these tax changes versus your long-term financial goals, and to avoid making hasty decisions. If there is major tax reform in the next few years, many individuals might find their hasty planning decisions to be very costly.
Even with higher capital gains inclusion rates, investing in your corporation still has many advantages.
After reading about the ins-and-outs of using your corporation optimally as a savings and withdrawal vehicle, let’s see it all in action with business owners like you…
Real Life Investment Strategies #3: What is the Difference Between a Lifestyle Reserve and an Emergency Fund / Financial Cushion?
Both Emergency Fund and Lifestyle Reserve Planning are Crucial Whether You are Accumulating Wealth or Getting Ready to Retire
Having an emergency fund is common advice, whether you are reading this in the financial media or hearing it from a financial advisor. Many people who are later in life and feeling comfortable with their financial situation might disregard this advice, assuming it only applies to those that don’t have as much financial stability.
The truth is that an Emergency Fund is something that everyone (even you!) should have. In addition, the added financial security planning of a Lifestyle Reserve should also be part of your financial plan. So, let’s explore exactly what an Emergency Fund is, how a Lifestyle Fund is different, and why both should be in place to ensure long-term financial alternatives and adaptability.
Most importantly, I’ll highlight how this applies to Suzie & Trevor Hall (The Accumulators) and Jim & Carol Oates (Almost Ready to be Retirees), so you can see how it can work for you.
Real Life Investment Strategies #2: Debunking Retirement Financial “Rules”
Should You Plan Your Retirement Savings According to the 4% Withdrawal Rate Rule or 70% of Pre-Retirement Income Rule?
Whether you’re an accumulator or preparing for retirement, how do you plan for saving AND spending your hard-earned cash in retirement?
My Answer: It depends.
All those popular retirement spending rules you hear about in the popular press or through your favourite financial guru really should be called guidelines. Augmenting blunt estimates with finer-pointed planning may not be as quickly accomplished. But it’s a far more effective way to plan for how much to save as you accumulate wealth, and how much to spend as you withdraw it. In fact, it’s best to consider retirement spending as being a variable process, versus a one-and-done equation.
Which is why it depends.
LET’S BEND SOME RULES: THE 4% WITHDRAWAL RATE RULE & THE 70% PRE-RETIREMENT INCOME RULE
Real Life Investment Strategies #1: Will Geopolitics Ruin My Financial Plans?
Timeless financial tips are well and good – but how do they apply to my investment decisions in real life?
To address that question, I’m launching Lowrie Financial’s “Real Life Investment Strategies.” Each post in this new series will use case studies to illustrate the choices real people are making, as they contemplate money management concerns in real time.
Many have active concerns around geopolitical events and their impact on their financial futures – clear theme emerges:
• worrying thoughts about current events,
• what the geopolitical climate may mean to your money, and
• what investment strategies to avert setbacks for your financial future
So, let’s address some of the more worrisome flash points looming large at this time: the world, its politics, and its politicians.
2023 Financial Year in Review | 2024 Investment Market Outlook
You might assume, the more experienced a financial professional is, the more accurate they can be with their year-end forecasts. Personally, I’ve never tried to predict which hot or cold stocks, bonds, sectors, or market sentiments to chase or flee each year. Instead, the more experience I’ve gained, the more firmly I believe in the Timeless Financial Tips I shared throughout 2023. For me, they serve as the best guide for “predicting” what investors should expect in 2024.
So, considering everything I’ve learned in 2023 (plus the quarter-century prior), I predict …
We cannot possibly predict how 2024 markets will perform.
That’s my expert forecast, and I’m sticking to it. I will, however, add one more prediction, about which I am nearly as certain …
Over time (think multiple years), capital markets WILL deliver positive returns to those who consistently participate in their expected growth.