Retirement isn’t handed to you on a silver platter. It takes time, preparation and a well-established plan. Many individuals are not financially or mentally prepared as they approach retirement. In this episode of “Your Money, Your Wealth,” CFP® Joe Anderson and CPA Al Clopine give you direct advice for getting a plan together so that you can achieve the retirement you’ve worked your whole life for. CFP® and Senior Advisor at Pure Financial Advisors, Matt Horsley stops by the show to talk about investing strategies. Learn the difference between the conventional and institutional approaches to investing and how the “behavior gap” can cause a complete collapse to your financial plan.
0:24 “40% of Baby Boomers have ZERO money saved” *source: CNBC
5:07 “A quick rule of thumb is take your liquid investments, multiply by 4%, and that would be your approximate withdrawal rate”
6:50 “Did you know that it’s estimated that more than half of American households will not have enough money saved to live the same lifestyle in retirement as they did before retirement even if they work until age 65?” *source: Center for Retirement Research
12:10 “There are hundreds, if not thousands ways to invest your money, but really it comes down to two different approaches”
12:15 “The first approach is what we call more of a conventional approach to investing; and it’s what most of us are used to over time”
13:48 “When you compare the two approaches, the institutional approach is a much more disciplined way to invest. Basically what that says is that what I want to do is have a fully diversified portfolio, controlling all of the things that I can control”
14:54 “What all the evidence says is that there’s this huge gap, called the behavior gap, between what people should do and what people actually do as investors”
17:04 “If you look at the performance of the S&P 500, over the course of the past 20 years, it has averaged around 8, 8 ½ %, while the individual investor has averaged more around 4%. If you take that over a longer period of time, like over 30 years, the S&P averages more towards 11[%] while the individual investor averages around 7[%]”
23:35 “Delaying Social Security can be a good thing because we’re living longer, and the longer you delay it, up to age 70, the more benefit you’re going to have per month for the rest of your life”
25:12 “401(k)’s are generally fully taxable, Roth IRAs are generally going to be tax-free”
