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Income for Life

Retirement income is different.

A comprehensive retirement plan means you can relax and enjoy retirement.

You can’t control everything in retirement. But when you have a comprehensive plan in place that helps you manage the aspects that are within your control it frees you up to relax and enjoy yourself.

Ask yourself these questions:

  • Are you prepared for retirement?
  • Do you have a strategy for investing your retirement assets?
  • Is it the same strategy you’ve used to get this far?

Your savings and investment strategy may have been quite effective in helping you accumulate assets. But that same strategy may not be the optimal one for creating lifelong retirement income.

What many fail to realize is that once retired, you are solving a different math problem. Your retirement goal is to increase the odds of maintaining a life-long standard of living over unknown economic conditions for an unknown life expectancy. The portfolio structure that most effectively accomplishes this goal is not always the same portfolio structure that accomplishes the accumulation goal of maximizing returns for a given level of risk.

In a nutshell, solving for maximizing life-long income is not the same as solving for maximizing risk-adjusted returns. Or put differently, what got you here, may not get you there.

If you like to dig in to the details, in Why Retirement Investing Needs to be Done Differently I have linked to many research studies that expand upon the difference in solving for life-long income vs. solving for maximizing returns.

If you’d prefer to watch a video, check out the Income for Life Model®. It is a comprehensive strategy for generating retirement income with the objective of providing inflation-adjusted income for life.

If you’re ready to get a plan in place, please fill out our Pre-Meeting Questions, and we’ll reach out to schedule a complimentary introductory meeting.

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Welcome Kathleen Mealey!

Kathleen Mealey

Sensible Money welcomes Kathy Mealey.

A service business lives and dies by the quality of its people. A sales organization isn’t so concerned with that.

In my brokerage firm days the revolving door of advisors who were hired and quit spun around at a rapid pace. It wasn’t about expertise, and unfortunately if often wasn’t about ethics. It was about  finding people who could sell.

Times are a-changing though, and for the better I must say. Our organization is on the forefront of that change. We are specialists.

You only retire once, and the planning that goes into a successful transition to retirement requires specialized knowledge. Most advisors don’t have the skills that I deem necessary to join our team. That’s why I was so excited when I found out Kathy was available and interested in what we are doing.

I first met Kathy in the summer of 2012. I was a guest lecturer at the RMA (Retirement Management Analyst) boot camp at Salem State University. She was attending to acquire her RMA designation.

She wanted to learn more so a few months later just prior to RIIA’s (Retirement Income Industry Association’s) fall conference in October 2012 she reached out to me to ask if she could take me to dinner when I was in town. (I’m in Arizona.) Bless her, she picked me up from the airport when I landed in Boston, we went to dinner, and chatted for hours.

The next time Kathy and I caught up was the summer of 2013. She and her husband Tom were on a trip to Arizona and stopped in the office to say hi. We got to chatting again and talked shop over happy hour. I thought she was great – so at the start of this year when I found out she was looking for a place to build her wealth management practice, I immediately reached out.

There are two things I consider when determining if an advisor is a good fit.

First, do they have the technical skills? As a CFP®, RMA, and EA (Enrolled Agent), Kathy has all the technical knowledge needed; it takes at least six years to teach these skills from the ground up.

But more importantly, I look for this intangible goodness about someone. I’ve often said, “I can teach skills, but I can’t teach someone how to be a good person.” When this quality is present, I know someone will fit in with our culture, and I know they’ll do the right thing for the client every time. That’s what matters to me.

Each and every person on our team is good to the core. And Kathy fits right in.

We are super excited to have her! Even better, she’s just as excited to be joining us.

If you want to learn more about Kathy you can visit her LinkedIn profile.

Written by Dana Anspach, Founder of Sensible Money.

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More Frequently Asked Questions About Our Services


Smart planning delivers an increase in retirement income when compared to an unplanned approach*.

How do your services work?

We quote you a one-time price to prepare a financial plan. We call this going through our Juicing® process – as it is designed to help you squeeze more out of your money.

Your financial plan projects how well prepared you are to meet your financial goals.

A plan is necessary in order to make the appropriate investment recommendations.

Once the plan is understood, most Sensible Money clients work with us on an ongoing basis to manage investments and provide planning on a holistic basis.

What does the plan cover?

  • If you are near retirement your plan covers the items we discuss on our Time to Drink page.
  • If you are farther from retirement your plan covers the items on our Filling Your Cup page.

 How long does this take?

  • The introductory meeting takes 30 minutes to an hour.
  • If you hire us it may take you several hours to gather the data we need to prepare your plan.
  • Then plan on meeting with us for 1-2 hours each over a series of 3-4 strategy meetings each spaced about 2-3 weeks apart.

 Do I have to move my assets to you in order for you to work with me?

  • In your 2nd or 3rd strategy meeting you will have the opportunity to decide if our investment management services are a good fit for you. You are not required to move assets to us. We are looking for clients who are willing to listen to our investment approach and consider it.

 How are your services priced?

  • Our initial financial planning engagement is priced as a package of hours at a rate of $100 – $200 an hour depending on the experience and qualifications of your advisor. Right now most planning work is priced at a rate of $150 an hour.
  • Investment management services are structured as a percentage of assets.

 What should I expect in the introductory meeting?

  • Expect a friendly conversation! No decisions are required at this meeting.
  • We explain our services, we will have questions for you, and you will have questions for us.

What should I bring to the first meeting?

  • Bring questions and any data you wish to share with us.

We update and add to the questions above as needed. We have additional information on our permanent frequently asked questions page.

*See Morningstar research paper Alpha, Beta and Now… Gamma.

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Case Study – How Much Can I Spend This Year in Retirement?

Your Money Your Values

Your Money Your Values

Once retired, the planning doesn’t end. You’ll still want to remodel, travel, or perhaps move to a different state. A plan helps outline the financial aspects of these decisions.

Take the case of a couple we’ll call George and Marla. They began working with us in early 2007. George is ten years older than Marla, and the goal was to get Marla retired so they could have time together while both are still healthy and living an active lifestyle.

Marla retired in 2010 and the two began traveling. In their first year of retirement they fell in love with Ouray, Colorado. They considered either buying a second home or moving there. We ran the numbers and suggested they spend more time there vacationing or renting before making a final decision.

By thinking through it, they decided they didn’t want to make a move, or have the hassle and upkeep of maintaining a second home. Instead they wanted to maintain their current home and travel more.

And travel they have! Their recent description of their trip overseas, filled with natural hot springs and outdoor ruggedness, made me want to travel more. They are definitely enjoying retirement and they understand the value of ongoing planning. That’s why at the beginning of this year they came in with the question, “How much can we spend this year?”

We decided to surprise them and ran their plan as if they spent an additional $50,000 a year, each year for the next ten years. No, that isn’t a typo. Not $5,000 a year – $50,000 a year. And their plan looked just fine. (They have over $1.5M in financial assets, as well as a pension and Social Security, and there mortgage is paid off.)

We call this the “spend more now” plan.  We assume a 5% growth rate on investments and a 3% annual increase in base living expenses now through life expectancy. We then test the plan in three ways:

  • Probability testing based on random future returns
  • Probability testing based on historical returns
  • Safety first testing based on a required return

Let’s take a brief look at how each one of these tests works.

1. Probability testing based on random future returns

You might retire into the greatest 20 years of market returns ever. Or you could retire into the worst 20 years. If the latter occurs, even though you make all the right decisions, you will end up with far less income or assets then if the former occurs.

Probability testing uses something called a Monte Carlo analysis and projects your asset values through life by running numerous simulations using different return possibilities. This testing includes accounting for the withdrawals you will need to take.


2. Probability testing based on historical returns

Using a particular strategy called liability-driven investing, we can ladder safe investments (like CDs and government bonds) so they mature in the years you need to take withdrawals. Let’s say we secure the first 8 years of your retirement income; then the remainder of your portfolio is invested in growth.

This is often referred to as a time-segmented approach. This strategy can be tested based on historical equity returns(including the Great Depression) and based on historical yield curves. If your probability of success is high, we know you’re in good shape.

3. Safety first testing based on required return

We also look at the specific cash flows you will need and can determine the minimum return you need to achieve your spending goals. If your required return is 4% or less, you’re in pretty good shape. If you need a return of 5% or more to meet your goals, you fall in the constrained or underfunded category.

If your plan looks solid, meaning it has close to a 100% probability of success and a required return of 4% or less, we feel confident that it will work. That’s when we get the fun job of telling someone they can spend more now.

If your plan looks good, and has a probability of success of 85%-100%, or requires a 5% or higher return, we tell you that your ‘spend more now’ plan might work – but we caution you that if the markets deliver poor returns for a sustainable number of years, your plan will need to be adjusted downward, and you may need to make reductions in spending.

If your plan has a lower probability of success, we caution you against spending more now, and discuss other options that may help you achieve your goals. We may also look at what is needed to get your plan back into solid shape.

This type of scenario modeling helps most upcoming retirees do one of two things:

  • Enjoy more fun things now, without any nagging worry in the back of your mind, or
  • Know what changes need to be made to get your plan to a place where it looks solid.

For those of you haven’t done any planning yet, we’d ask you, why guess, when you can know?

We’d welcome the opportunity to take you through our planning process. To inquire about our services we ask that you fill out our Pre-Meeting Questions. Once we receive those we reach out to schedule a complimentary introductory meeting to learn more about you and explain our pricing options.

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