When Saving Money Matters In Your Retirement Plan

on January 23, 2018 Comments Off on When Saving Money Matters In Your Retirement Plan

To save or to invest? Or do we do both?

There can sometimes be a misconception that by simply investing in the markets, you will be able to accumulate enough savings for retirement.  The unfortunate reality is that the growth that can be achieved from investing is extremely important, but there must be an adequate amount of savings set aside over time for it to work.

The following example can show you exactly how critical the savings process is.  A portfolio that grows at an average rate of 7% over time for 20 years will have approximately 50% of its ending balance due to the savings added over the years and the other 50% due to the investment growth.  The image shows how the growth portion of the portfolio (the green part of each bar) increases over time.  This portfolio assumes an average growth rate of 7% and a recurring addition of $5,000 at the end of each year.  After 20 years, the portfolio value is worth over $200,000.  It is critical to save and begin saving early.

If you have questions about your current retirement plan and how you can best maximize your return, contact us to day to schedule a meeting.


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Jase TeamWhen Saving Money Matters In Your Retirement Plan

Why Target Date Funds Are Not The Answer

on January 9, 2018 Comments Off on Why Target Date Funds Are Not The Answer

One of the questions that we are frequently asked is whether or not target date funds are a sound investment strategy. To us, target date funds provide a sense of comfort when it’s not universally understood how they work. To understand if they are the right strategy for you we must first know how they work.

Each target date fund has a glide path associated with how the portfolio changes over time from being more aggressive to being more conservative. It is also important to know that each mutual fund company has their own methodology for their glide path. As a result, you must research the fund companies to understand what their glide path is to determine if you are comfortable with the timing of their investment changes. While they all have similar names, there is no standardization for the portfolios.

A problem that we recognize is that a younger investor purchasing a target date fund may be significantly more aggressive in their portfolio than they realize. When the stock market volatility increases, they may sell the position and lose confidence in the long term investment process. By using a risk based approach, the investment process allows the investor to set a level of volatility in their portfolio they feel is most appropriate. Additionally, for many investors reaching retirement, the allocation of the portfolio may be too conservative given the needs for retirement.

To us, utilizing a risk and needs based planning approach, a balance between the necessary level of risk and potential reward to create better retirement outcomes is important. To learn more about your investing and how we can help you with your strategy, contact our team today!


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Jase TeamWhy Target Date Funds Are Not The Answer