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November’s Online Class: The Secret to Finding the Perfect Investment

November's Class: The Secret to Finding the Perfect Investment

November’s Class: The Secret to Finding the Perfect Investment

In this free online investment class we’re going to cover basics like what is a stock, what is a bond, how mutual funds work, the difference between passive and active investing and much more.

Then we’re going to look at this in light of the ongoing quest for the “perfect investment” and how you can use this info to design the perfect investment approach for you.

This class will be live. It will run about one hour followed by questions and answers. It will be offered on a Tuesday evening. Specifics below.


  • Tuesday, November 4th, evening, 5 pm PST/6 pm AZ and MST/7 pm CST/8 pm EST – class limited to first 100 attendees

Registration Required

What You Will Learn

In addition to gaining an understanding of investing basics you can expect to learn:

  • The risk differences between investing in stocks vs. stock mutual funds.
  • How bonds and bond funds react to changes in interest rates.
  • The difference between passive and active investing approaches.
  • The single biggest proven way to choose the best performing funds.
  • How often bear markets and market corrections occur – and how they affect you.
  • How portfolios are typically constructed and why.


  • You: This class is appropriate for all age groups and anyone who has ever owned investments.
  • Your presenter: This is a live one hour presentation followed by Q&A hosted by retirement expert Dana Anspach.

Next Class

We’ll be announcing our next class time and topic soon. To receive announcements about our free online investment classes scroll all the way to the bottom of any one of our web pages and sign up for our Financial Sense newsletter.


How to Put the Meaning into Retirement

What will turn your retirement into Retire-Meant?


You have a unique opportunity in retirement. A large portion of your time is no longer needed to sustain yourself. You have true financial independence and the possibility of using your time to contribute to anything you want – whatever matters the most to you.

Given that, if there was one thing and only one thing I could get you to do as you transitioned to retirement, what do you think it would be?

Most of you are probably smiling thinking “She’s going to say we need to get a financial plan.”

Nope, that’s not it.

The one thing I would want every near retiree or existing retiree to do is attend The Landmark Forum.

In September 2014 I had the life-changing experience of attending Landmark’s three day workshop about Living a Life You Love.  It was a colleague of mine who suggested I go. I cannot thank him enough.

This workshop is something I wish every human being was required to do. Sounds dramatic, I know.

But if not every human being, then at least every retiree. Because collectively you retirees have the power to change the world. You have the time and the experience to make a difference. It could be a difference in a child’s life, an organization’s direction, your community, your church, your family…

The challenge is… how? The Landmark Forum will show you.

You have the possibility of putting the Meaning into your retirement in a profound and deep way that may never have occurred to you before. You have the possibility of having these be the best years of your life and not just in the way you may read that on a greeting card – but truly the very best and meaningful years of your life.

Our role in that is to free up your finances so you don’t have to worry about money. Free of that concern, time and energy can be directed toward so many other things that matter.

I would describe my own experience with Landmark’s program as if someone gave me ‘The Secret to Life’. Every time I say that to someone they ask me “What is it?” There is no way for me to answer with words. What I can promise you is your discovery will be meaningful and personal to you.

Landmark is a world-wide program that has a profound impact on people of all nationalities, religions, economic, and educational backgrounds. I encourage you to go. You can learn more at Landmark Worldwide.

If you register, please email me as I would like to be part of your journey and would like to personally share with you my own experience.

What I want you to experience is Retire-Meant, not retirement.

By Dana Anspach

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Investment Sense – Short Term Memories

Index Returns Through June 30, 2014

Index Returns Through June 30, 2014

The conference room was full with over 100 financial advisors in attendance. The speaker asked a simple question. What were two of the biggest items in the media in the last few years that all your clients were asking about?

I guarantee many of you reading this asked us about these things – and considered moving your portfolio to cash – just in case.

Can you remember? They were:

  1. Greece
  2. The Government Shutdown

We fielded numerous questions about these things and spent a lot of time “talking people off the ledge” so to speak; meaning encouraging them to stay invested.

Turns out, today, no one can even remember what it was they were so worried about.

Long term portfolio strategy is not – and should not – be dictated by current events. As we stand today, risk is long forgotten (which is worrisome) but no doubt soon enough the media will find something to pontificate about and you may begin thinking “Should I cash out?”, “Should I buy gold?”, “Should I put it all in the safe….?”

If your portfolio was built with a long term goal in mind the answer will be “You should stick with the plan.”

You make the plan when you are in a sound, stable, unemotional mindset. It gives you a path to follow when current events throw you into an overly emotional or less-than-stable mindset.

As things stand right now, you may feel your plan is too conservative. In the first half of this year stocks of all kinds have seen gains with the S&P 500 up about 7% for the year and other equity asset classes delivering increases between 3% (U.S. Small Cap) and 17% (U.S. REITs). (The graph at the top shows results for each asset class through June 30th, 2014, for the month, past five years, and past ten years.)

Just as negative current events engender fear, positive current events elicit greed. When markets climb, it is easy to get greedy and feel like you could have gotten more.

I will never forget practicing in Colorado in 1998 and sitting down for a review with a client who owned a bond fund, a blue chip stock fund, and a science and technology fund. Their bonds and blue chip stocks had floundered, while science & tech was up over 90% for the recent 12 months.  They insisted on moving all their money to the science & technology fund. I made them sign a statement saying this was against my advice. Over the next few years science and tech experienced unprecedented losses. Getting greedy is not part of a well-designed long-term plan.

Now is not the time to get greedy and take on more risk. Now is the time, just as during any other time, to stick with the plan.

The plan we have built for you will take into account current market gains. For those of you in retirement and taking regular withdrawals, we will be determining if we should take gains off the table. This involves measuring your accounts against your plan, assessing future withdrawal needs, and evaluating tax consequence – before any changes are made. This is our job. This is part of the plan.

*Returns data in graph above from Advisor Intelligence. When possible we report index fund returns to show performance net of fund fees. As such in the graph:

  • Total Bond Market Index is: Vanguard’s Total Bond Market Index Fund(VBMFX)
  • US Large Cap is: Vanguard’s 500 Index Fund (VFINX)
  • US Small Cap is: Vanguard’s Small Cap Index Fund (NAESX)
  • Real Estate is: Vanguards’s REIT Index (VGSIX)
  • International Large cap is: Vanguard’s Total International Stocks Index (VGTSX)
  • International Small Cap is: MSCI World Ex USA Small Cap Index (not a fund)
  • Emerging Markets is: Vanguard’s Emerging Market’s Index Fund (VEIEX)

(Investment Sense is an almost-monthly posting of market commentary with a common sense twist. For all our latest commentary follow us on Facebook.)

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What Should a Retirement Withdrawal Plan Include?


Retirement income planning involves knowing how much to pour each year, and out of what bottle.

Imagine you are headed out on a hike. If it’s going to be a long hike, you’ll likely wear a Camelback and maybe even fill up a few extra bottles to take with you. This process of filling up your bottles represents the savings, or accumulation phase, of your financial life.

Once retired, the process changes. Now you need to determine how much you can drink from each bottle, and over what time frame, to make sure you have enough to last throughout the adventure. This is the decumulation phase.

This is the point in time where you need a withdrawal plan. It’s no longer about filling up the bottles as fast as you can – now it’s about using the water at an appropriate pace, without over or under-consuming as you go. At this point in time you need a different way of measuring success.

A few upcoming retirees recognize that their needs will change and they outline the new criteria they should use to measure against. I met with a man recently who came to his appointment with typed notes that outlined what he expected a retirement withdrawal plan to include. His notes included these five points he expected us to cover in our planning process:

  1. The income goals to be met via withdrawals (core vs. discretionary).
  2. The assets to which the withdrawal strategy applies that will fund those income goals.
  3. The initial withdrawal rate taking into account the tax implications of distributions from the qualified accounts and the pending required minimum distributions.
  4. The method for determining the source of each year’s withdrawal income from the portfolio.
  5. The method for determining the withdrawal amount in subsequent years, including both the trigger points for adjustments (other than an inflation based-increase) and the magnitude of the adjustment itself.

I was impressed! He said he had compiled his list from various articles he had read about retirement income planning. I am going to expand up on each of his five items, and describe how we incorporate each into our process.

1. The Income Goals

It all starts with what you want to spend. We have to identify the amount of money you need to maintain a comfortable lifestyle in order to see if that goal is achievable. We use budget forms, bank statements, and conversations with you to determine this. First we need to identify essentials, like a roof over your head, health care, food, etc. Once essentials are covered, we can see if there is room for you to spend extra on things like more travel, hobbies, or gifting to children and grandchildren.

2. Assets to Be Used

A smart retirement plan should not require you to use every available asset you have. There are some assets that should be carved out as reserves. We like to set aside an emergency fund that we do not include in your plan as an asset that is available to produce retirement income. We also think it makes sense to set aside home equity as “Plan B”. Life happens and it makes sense to set aside assets for things that may come up that could not have been anticipated. We show you which assets are and are not included in your plan.

3. Withdrawal Rate and Taxes

Your withdrawal rate is a measuring device. It can be used as a rule of thumb (as in the 4% retirement rule), but it should not be the final factor in determining your withdrawal amount each year. It needs to be put in perspective of your entire plan – your expected withdrawals over retirement – not just your starting withdrawal rate.

Taxes also have to be factored into this analysis. Some retirees pay almost no taxes so they keep every dollar of IRA withdrawals. Other retirees will pay 35% or more in income taxes in retirement, so they only keep .65 cents of every dollar of IRA withdrawal. Simply taking your account balance multiplied by a withdrawal rate of 4% doesn’t tell you how much after-tax money you’ll have available to spend. Your plan must factor in taxes.  We do this by projecting an annual tax return for each year of your retirement – something we call a multi-year tax projection.

4. Source of Each Year’s Withdrawal

There are numerous methods for managing retirement income portfolios. A few common ones are:

  • interest only, where you only spend the interest and dividends generated by the portfolio,
  • systematic withdrawals, where you follow a withdrawal rate process
  • time segmentation, where you use a short term investment ‘bucket’ for money you’ll need in the first 5 years of retirement, and mid and long term buckets for money you won’t need to touch any time soon.

The important thing is that you understand the methodology and stick with it. Jumping between methodologies is not an effective strategy.

Our approach is most closely aligned with time segmentation. In partnership with an investment firm, Asset Dedication, we build an income ladder that secures your near-term withdrawal needs, so you need not worry about what that markets are doing this month, or even this year. With this process for the first 5 to 10 years of retirement we have each account’s withdrawal sourced to a bond, CD, or other safe investment that is maturing. The remainder of the portfolio can then be invested in long-term growth choices.

Then there is a monitoring process to measure your accounts against your plan. This monitoring process tells us when to harvest the growth portfolio and add on to your income ladder. This process helps manage both sequence risk and interest rate risk. It is not a process designed to get every extra bit of return – that is not the goal in retirement. It is a process designed to secure a desired level of spending for life.

5. Method for Determining Withdrawals in Subsequent Years

Planning is not a one-time event. Each year we update the analysis we do for our clients. We use a few things to determine subsequent withdrawals. The first thing we look at is an annual tax projection. This helps us figure out what account withdrawals should come from, and if we can realize capital gains at a zero percent tax rate. This must be done each year, and when employed consistently can save a retiree thousands in taxes over the years.

The second measuring device we use is your plan. Did you spend more or less than our projections? Did accounts exceed your target rate of return or not? If you spent more, we discuss this. If accounts exceeded the target rate of return, we might take profits. If we go through a prolonged period of time where accounts underperform (like 2008-2009) then we may ask you to forego inflation raises, and take out no more than you withdrew the year before. If your spending was greater than we projected and the markets are poor, we may suggest a pay cut.

This dynamic monitoring process allows us to identify potential problems fifteen years in advance, and take action now to prevent those problems from materializing.

All of the above components are part of a well-constructed withdrawal plan. Does every retiree need each component? No, probably not. But every upcoming retiree can reduce stress, and increase their peace of mind by engaging in the planning process.

-Written by Dana Anspach

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