Retirement tters Investment Strategies for Retirement Summit Investment Advisors October 15, 2015
Financial Matters!"#$"% President Series Summit Investment Advisors CFP Summit Investment Advisors Securities offered through LPL Financial. Member FINRA & SIPC. Investment advice offered through Summit Investment Advisory Services, a Registered Investment Advisor. Summit Investment Advisory Services and Summit Investment Advisors are separate entities from LPL Financial.The LPL Financial Registered Representative associated with this site may only discuss and/or transact business with residents of the following states: AZ, CA, CO, FL, GA, IA, IL, MI, MN, MO, MT, NC, ND, NE, NY, OH, OT, TX, WA, WI, WY.Copyright 2014 FMG Suite 1-062798
About my Background Firm Commitment The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult a professional for specific information regarding your individual situation.
Click to Play
Retirement: Crucial Considerations How long should retirement last? How much is it expected to cost? What sources of income do I anticipate having? What investment strategies could help me?
How Long Will Retirement Last? 80 75 70 65 78.7 years 60 55 50 45 49.2 years Average Life Expectancy 40 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2011 Sources: CDC National Center for Health Statistics, 2013; Society of Actuaries 2000 Mortality Table
How Much Is It Expected to Cost? Dreams & Goals Expenses Unique Circumstances
Estimating the Cost of Retirement
Potential Sources of Income Retirement Plans Savings & Investments Social Security
The Long-Term Trend of Aging 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 3.9 million U.S. Population Age 65 and Older 40.2 million 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2009 2010 Source: Department of Health and Human Services, 2014
Rise & Fall of Retirement Plans 35% 30% 25% 20% 15% 10% Percentage of Employees Who Participate Defined Contribution Plans (401(k), 403(b), and 457 Plans Defined Benefit Plans (traditional pensions) 5% 1979 1983 1987 1991 1995 1999 2003 2007 2011 Source: Bureau of Labor Statistics, 2013; (most recent data available)
Retirement Investment Objectives Protect Principal Certificates of Deposit Money market funds Pursue Growth Individual stocks Growth-oriented mutual funds Variable annuities Generate Income Individual bonds Income-oriented mutual funds Fixed annuities Mutual funds and variable annuities are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.
Objective: Protect Principal Money Market Funds Certificates of Deposit Cash Alternatives
Watching the Money Flow $550 2,000 IN BILLIONS $500 $450 $350 $300 Money Market Fund Assets S&P 500 1,800 1,600 1,400 1,200 1,000 $250 800 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: Investment Company Institute, 2014, Standard & Poors Company, 2014. For the period January 1, 2004, to December 31, 2013. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index. Actual results will vary.
Objective: Generate Income Individual Bonds Income-Oriented Mutual Funds Fixed Annuities
Bond Laddering Year 1 Year 2 Year 3 Year 4 Year 5 $10,000A (matures in 1 year) at 1% $10,000 at 2% (matures in 3 years) D $10,000 at 1½% (matures in 2 years) B $10,000 at 2% (matures in 3 years) E $10,000 at 2% (matures in 3 years) C This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary. Diversification is an approach to help manage risk. It does not eliminate the risk of loss if security prices decline.
Bond Laddering Year 1 Year 2 Year 3 A $100 $150 $200 B B C $150 $200 $200 C D $200 C $200 D $200 E Total Average Return $450 1.5% $550 1.83% $600 2% This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary.
Income-Oriented Mutual Funds Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.
Fixed Annuity Premiums Payout Accumulation Phase Payout Phase
Objective: Growth Potential Individual stocks Growth-oriented funds Variable annuities
Asset Allocation: The Determining Factor Overall asset allocation Other factors Source: Brinson, Singer, and Beebower, Determinants of Portfolio Performance II: An Update, Financial Analysts Journal, May-June 1991. Past performance does not guarantee future results. Asset allocation is an approach to help manage investment risk. It does not eliminate the risk of loss if security prices decline.
What Investment Strategies Could Help Me? Aggressive Portfolio Best Year...33.3 % Worst Year...-32.8 % Average...10.1 % Stocks 80% Bonds 10% Cash 10% Stocks 20% Bonds 20% Cash 60% Conservative Portfolio Best Year...16.1 % Worst Year...-12.7 % Average...5.9 % Source: Thomson Reuters, 2014. Past performance does not guarantee future results. Actual results will vary.
The $ 370,000 Difference $ 700,000 $ 600,000 Aggressive Portfolio $681,864 $ 500,000 $ 400,000 $ 300,000 Conservative Portfolio $313,509 $ 200,000 $ 100,000 Start Year 10 Year 20 This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Past performance does not guarantee future results. Actual results will vary.
Retirement Investment Strategies
Financial Matters Series Summit Investment Advisors Securities offered through LPL Financial. Member FINRA & SIPC. Investment advice offered through Summit Investment Advisory Services, a Registered Investment Advisor. Summit Investment Advisory Services and Summit Investment Advisors are separate entities from LPL Financial.The LPL Financial Registered Representative associated with this site may only discuss and/or transact business with residents of the following states: AZ, CA, CO, FL, GA, IA, IL, MI, MN, MO, MT, NC, ND, NE, NY, OH, OT, TX, WA, WI, WY.Copyright 2014 FMG Suite 1-062798