Retirement Lost

In nearly 40 years of private practice, I've interviewed very few prospective Client's who's view on retirement and how that's all gonna work out is even close to being accurate. 

Retirement planning is complicated in and of itself. It becomes more complicated with the pressure of being in "distribution mode" as opposed to a lifetime of "accumulation mode." Look when you were building your nest egg harrowing markets didn't bother you all that much because you were still making money. Well, that changes when you're living off your nest egg and employment is well into the rearview mirror. 


Prudential makes a good point in their most recent commercial that you should be focusing on how long you might live not how long you think you'll live. With the advent of increasingly effective medical technology, many, many of us will leave the typical mortality ages in the rearview mirror by a pretty fair amount. 

The mathematics of how retirement will likely play out are daunting and not something that a typical pre-retiree or retiree is in a good position to calculate. And missing the math might scuttle an otherwise rewarding retirement. 

Am I pitching you to seek advice? Well sure I am because advice when done right works. 

Will you have to pay for the advice, of course you will. But unbeknownst to you, you already are you just haven't figured out why or how. 

Here's some help in that regard. Then take your savings and get some real planning done. It may be the most important step you take. 

Winning the Losers Gane

Sorry can't take credit for the title to this blog, it belongs to Investment Guru Charles D. Ellis and is the title to one of the best books on investing ever written.

That book squares up pretty well with one of my favorite blog posts that came up on todays read list. "Why Can't "Winning" Active Managers Keep on Winning"

If you invest, no matter if you invest on your own for your own account, or you have an advisor, banker or insurance broker that invests for you, both of these pieces should be a must read and for good reason. 


The quest to find a strategy or person that will beat the market is a failed attempt from the start. Frankly, if you're investing for yourself, I'd question that as a strategy as well. If the typical mutual fund manager, with almost unlimited funds and access to data and research the likes of which you'll never see as an individual investor can't consistently beat the market, the fact that you're going to based on data you cobble together when you're not doing your day job seems pretty unlikely frankly. I mean seriously, look at the math. 

The good news is that if you're investing for yourself you won't fire yourself and you'll make obtuse excuses for your failure, one of which is that at least you're not paying for the losses. But you are actually paying for it, sure, it's a debit to your net worth that you'll never actually calculate and good thing because that number would make you sick. 

There are more proven methodologies you just have to find them. 

Advice Is Advice Until It Isn't


A recent study shows that 53% of employees receive no investment advice about how to allocate the money that they contribute to their 401k plan. 

What we know to be true is that independent research as well as academic research in both the investment industry as well as in the area of behavioral finance, is that left to their own device, people make horrible investment decisions. 

For many, your company retirement plan is your sole means of investing. (That's a problem in and of itself, but that's a topic for another blog post at a later date and time.)

Here's what's likely to happen:

  • Market timing; you'll move money in and out of markets trying to beat professionals at a game that you really don't understand. Odds are great that you'll fail at this attempt, though the temptation of psychic comfort will hard to avoid
  • Concentration: not the good kind, as in working with focus, the kind where your money is nested in a singular investment or worse, in your company stock. Ask the folks at Enron how that worked out for them
  • Not engaging a Fiduciary as your partner: Fiduciary's are required to protect your best interest above all others; everyone else? Well they're typically out for a commission win at some point and likely sooner rather than later
  • Saving too little or saving too much: Yes, that's right, saving too much! There I said it. The reality is that you'll walk away from work before your age 70 and 1/2 which means you better have some non-retirement dollars to draw on to get you by. The government doesn't require you to take IRA or other distributions until that magic 70 1/2 age so if you have to take them earlier, congratulations you're now voluntarily paying taxes. If you do that, run the risk of giving back the bulk of the tax savings you had banked over a lifetime of making your plan deposits. Consider capping your contribution to the amount that you'll need to get your employer match and putting the difference in a tax efficient personal portfolio. That's the bridge that will get you from retirement to age 70 1/2 when your required to begin taking retirement withdrawals.

Bottom line is that saving for a rainy day is a good strategy, been around for a long time. 

But, that doesn't bely the fact that there's still a great way, a good way and horrible way to do that and you should find yours. The results will matter. A lot. 


I'll Get By Without A Plan


Yes you will. 

You'll get by. 

But what you have to ask yourself at every point is was that your intention? To get by?

It's easier not to have to answer the tough questions. It's easier not to have to keep score. 

Going it alone makes getting by seem pretty easy. 

But when in your life has inattentiveness and winging can it ever be truly been "optimal."

If you're not focused on "optimal" then you're not focused. 

Maybe it's time for you to start. 

There's More To It Than Money

For nearly 20 years a segment of the Wealth Management profession has been letting you know a very simple, yet immutable fact: That there's more to a "happy" retirement than money. 

The problem has long been that we don't freely associate our "value" (either in the world or; especially in our own minds) with our work. While we may bitch more than a bit about how much we hate our jobs, frustrate over work, good and bad assignments, colleagues, etc. for many of us; our work is an important marker of our vision of how we fit in in the world and why.

As you make your choices to turn away from your work and focus on that next horizon, don't lose sight of the fact that separating from work is just; that a separation. And like any other time connections are broken, the results aren't always easy and transitions can be cumbersome, clumsy and painful. 

Working with someone who has experience in these transitions can be an invaluable part of both your PRE and POST Retirement Planning. 

Sarah O'Brien at CNBC certainly has a good take on it. She has found what I've long known, that accumulating wealth is important; but accumulating wealth targeted on specific goals and lifestyle concerns is imperative. 

When is a good time to start all this? That's simple, yesterday. 

If you haven't started yet or haven't considered it yet, today's a good time to start. 

First Time Home Buyer--- Here's Some Tips From An Expert

As the overall trend in interest rates starts to inch up, the pace of home purchases has the ability to accelerate as people try to get into the market before a substantive and sustained period of interest rate increases hit. 

In this first Blog Post of 2017 Stephanie Kotrosits with Wiechert Realtors, shares her perspective on what new home buyers need to consider in a market and a process,  that may not be a "straightaway" as one might think. 


Buying your first home is one of the biggest financial decisions that you'll make. It's a process that can be both scary and difficult. 

When Bob asked me to contribute this blog post, my goal was to give you some tips that are time tested and proven. I've seen them work over my years in the real estate business. I've seen them work for my Clients as well as those of my colleagues. 

Here's some of the things that you can do to optimize your efforts and remove some of the stress from what's already an innately stressful process. 

1. Keep Track of Your Credit

Good credit is an imperative in today's world and it's no less important when considering buying a home. The better your credit the better "deal" you'll get on your mortgage interest rate. A credit score of 700 or better is a plus for sure. Good credit means not just paying your bills on time, but also, involves the overall scope of your "available" vs. "used" credit. To be in the drivers seat with lenders, you'd want to have a fair amount of "available" but unused credit. Lenders typically want to see that you've used less than 30% of your available credit. 

You can reach Stephanie direct by email at or by phone at 610-657-3858.

You can reach Stephanie direct by email at or by phone at 610-657-3858.

2. Find A Lender That Suits Your Needs

Managing home related debt impacts you in many ways. Not only is it a matter of household cash flow but it also indirectly impacts what you'll be able to save and invest over time. 

You can begin looking at lenders online, no problem there. But you'll need to do your homework. Online services not only let you learn about a possible lender for your purchase but allows you to generally compare rates. 

It's a good idea to focus in on a few local lenders and have them do a simple pre-qualification over the phone to see what kind of rates that they can actually offer you. Looking generally at rates from lenders is one thing, your specific rate is obviously the most important thing. 

Getting the mortgage part of the transaction right can save you thousands of dollars over the life of your loan.

3. Know What Kind of Loan You're Looking For

A good lender is going to review all your options for you and you might be surprised at how many options that there really are. Let's take a look at some of the more popular and common types of loans. 

The most common of loans is an FHA loan, which is insured by the Federal Housing Administration. Since this loan is insured by the FHA lenders are protected against possible borrower defaults. Because of that additional layer of "protection" loans from the FHA are offered with attractive rates and low down payment amounts. 

Similar to FHA loans, USDA loans, offered by the United States Department of Agriculture are an attractive option as well for rural homebuyers. USDA loans can be for 100% of the market value of the property and with no money down and reduced premiums. In order to qualify, the area you're buying in must be considered "rural" by the Government. You can see if your loan might qualify by clicking this link. 

There is another commonly used loan, this one instead guaranteed by the US Government is the VA loan. 

Offered through the Department of Veteran Affairs, if you have been enlisted in the armed services, you might qualify for this loan. The VA offers no money down mortgages with no monthly PMI (Private Mortgage Insurance). PMI is a monthly insurance payment designed to offset ant costs to the lender if the homeowner were to default. PMI can be an added cost on any mortgage except VA loans. Rates for PMI are typically $55/month for every $100,000 that you finance. 

And lastly, there's the Conventional Loan. Conventional loans are not guaranteed, backed or insured by the Federal Government. Conventional loans generally require at least a 10% downpayment. 

There are two types of Conventional Loans, conforming and non-conforming

Conforming loans meet the standards of Freddie Mac and Fannie Mae, two government agencies whose role is to make mortgages more widely available. 

The best example of a non-conforming loan is a Jumbo Mortgage. Jumbo Mortgages would not meet the guidelines of either Freddie Mac or Fannie Mae. At high purchase prices, limits set by Freddie Mac and Fannie Mae are exceeded.

4. Find A Real Estate Professional You Can Trust

There's nothing more valuable to you as a potential homebuyer than finding a real estate professional who understands your needs and is willing to do everything that it takes, to make your dream of home ownership a reality. But where do you find this professional amongst a veritable sea of choices? Here's some tips. 

- Talk to people you know who've recently gone through a real estate transaction. Ask them if there real estate professional made their transaction easy or were they hard to deal with. Would they recommend that person for you?  Who else might they recommend? A referral from a happy homebuyer is the best place to start

- Start visiting Open Houses and using it as a chance to not only find some homes, get some ideas, and chart your course, but also to interview prospective real estate professionals in attendance that you might use.

It's easy to get swept up in the excitement of a new home and ignore the process. But from experience, I'd caution you to keep everything in perspective.

While we can all agree that finding the right house is important, getting the transaction "just right" is equally as important. Finding your new home is only valuable if you can put a team in place that makes your ownership dream an ownership reality. Surrounding yourself with a sound team of professionals is critical to your success.