Overview

Our life-affirming process …

For us, financial stability has little to do with a balance sheet and more to do with a balanced life; the life you want to live into your retirement years. True wealth is all that money can’t buy and death can’t take away. It’s based on far more than financial planning. It requires a comprehensive approach that integrates imagination and innovation with careful calculation.

With this in mind, we define our services into two strategies:

PAYCHECK and PLAYCHECK …

Paycheck Strategies Include:

• Social Security
• Pension/Other
• Annuities

These services represent the cornerstone of a family’s paycheck in retirement. Retirement planning must cover many risks: inflation, deflation, market, long-term care needs and more. However, the greatest risk is longevity – outliving your resources! Longevity risk is actually a risk multiplier: the longer you live, the more exposed you are to all the other risks.

How can you minimize longevity risk at a time when company pensions are disappearing and social security benefit levels are facing an uncertain future? By making smarter savings and investment decisions!

We believe your lifestyle income should come from guaranteed sources – to minimize risk and assure a secure retirement.

BEWARE OF THE RETIREMENT RED ZONE

The worst time for your investment portfolio to be exposed to a market down turn is the five years before and five years after the day you retire—some have called this time the “retirement red zone.” Losing money in this segment will greatly impact how you can spend and withdraw money throughout your entire retirement.

We all know what happened to the markets in 2008 and 2009. For some boomers close to retirement, the financial panic may have had a devastating impact on their portfolio.

Hypothetical Retirement Scenario

The following is an example of an individual retiring in 2000 with a diversified portfolio of 60% stocks and 40% bonds. The retiree started with $100,000 and took a 5% withdrawal or $5,000 in income a year and maintained the same level of income for all years.

^{Note: Stock return is represented by iShares S&P 500 Core (IVV)and Bond return is represented by iShare bond aggregate (AGG). The return data has been obtained from Yahoo finance.
** Beginning withdrawal amount ($5000) / Beginning value.}

The table above shows the client needed $5,000 a year to meet his lifestyle income or 5% of his starting retirement assets.The critical retirement “Red Zone” was not in this retiree’s favor. After 10 years the retiree is left with $52,518 in his retirement account and his $5,000 of income now represents a 9.8% distribution.

At this point the hour glass has started and this retiree will run out of money. He needs to decide to either reduce his lifestyle income by cutting costs, going back to work or just burying his head in the sand and ignoring the inevitable.

Conclusion

We refer to this concept as “Reverse Dollar Cost Averaging” and this is why we believe that retiree’s lifestyle income should be from guaranteed sources.

PlayCheck Strategies Include:

• Stocks
• Bonds
• Real Estate
• Commodities
• Precious Metals

At SG Wealth Management we believe that a well-diversified portfolio should be invested in non-correlated asset classes. This will assure the balance between risk and reward that will stand the test of time.

We provide these services through Fee-only Investment Management

Financial Risk Classes

• Green: most conservative
• Yellow: moderate risk
• Red: most aggressive

3 Phases of Investment

• Accumulation: your working years where time horizons are longer and tolerance for risk is higher.
• Preservation: 5 years before retirement through your retirement life.
• Distribution: When risk of running out of money has diminished leaving a clear sign you will never spend all your assets. Time for comprehensive estate planning considerations including children, grandchildren, charities and other beneficiaries.

As you travel through the 3 phases of your investment life your allocations need to change accordingly.