The Clark Group Asset Management

What kind of legacy do you want to leave? For some retirees we work with, the legacy is financial. They want to move substantial wealth to the next generation. For other retirees we work with, they have a “die with zero” mentality. They want to enjoy as much of their money as possible, while their legacy is around the memories and time they spend with family along the way. However, most people fall somewhere in between. They want to enjoy their hard-earned wealth and leave whatever is left behind to their family. More often than not with our clients, they can do both.

Finding the right spending balance in retirement can be tough. After all, you’ve spent decades saving, investing, and planning. But now that you’re here, how do you make sure your money lasts and enjoy all those years of hard work? We have found that there are two types of spenders in retirement. Take a look at which one you are, and how your psychology impacts your spending decisions.

"Are you ready for retirement?" With the recent stock market run-up, many people are contemplating retirement or even retiring early. However, have you ever addressed any of the "risks" that could impact or derail your retirement? In The Clark Group's next webinar, we will highlight 7 crucial risks to your retirement AND how to plan for them. Topics such as: sequence of returns risk, high fees, taxes, and long-term care are just a few to consider. Claim your spot using the Zoom registration link: https://lnkd.in/g7vuS9gd *If the live event time does not work for your schedule but you would like to attend, please register for the event and we will contact you with the recording*

"Cash is king!" Well, it depends on what it is for, but not long-term... 📉 Back in 2022 when stocks and bonds were volatile, I remember hearing all the time that "cash is king." However, it all comes back to what is the cash for... If it's for a future down payment, rainy day fund, a near-term VC investment, or a car purchase, then yes; Earning 4-5% in cash until you use that capital is a great choice and usually advisable. However, we came across many new clients over the past year that had a large portion, sometimes even the majority of their retirement portfolio, sitting in cash expressing that 5% is "a good return," so I don't need to take on additional risk (more just additional volatility). Some of these same people were in cash for most of 2024 as well. Obviously, hindsight is 20/20 and the Fed is now cutting rates, so 5% is no longer upon us, but history showed us that this day would come. Chart from BlackRock showing equities vs. cash vs. bonds over the past 2 years.

The Federal Reserve recently voted to cut interest rates, shaving 0.5% (50 basis points) off the benchmark. As of September 18th, 2024, the federal funds rate sits at 4.75% to 5.00%. Markets rallied exuberantly at the news, reaching new highs and finishing the 3rd quarter near a record close for the S&P 500... What could come next?

I was recently speaking to a potential client on our discovery call, and they said, “I have friends who are very wealthy and just manage their portfolio on their own, why shouldn’t I just do that?” The main reason: you don’t know what you don’t know 🧠 Coincidentally, a few weeks prior to that conversation I came across another potential client with a net-worth of roughly $30MM. This person had been managing their assets on their own for years. They didn’t think they wanted to work with an advisor but thought they would just “get a second opinion.” Well, come to find out they had no idea about estate tax rules and the benefits of lowering their taxable estate through irrevocable trusts. All they had was a basic estate plan… Their estate and family would potentially be paying hundreds of thousands in taxes and attorney fees upon passing if they kept everything as is. When thinking about working with an advisor and financial planner, it is not just about your investment portfolio and asset allocation (even though that’s important too). Here are a few main reasons why you would want to work with an advisor: ◾ Delegate: Successful and truly "wealthy" people understand that time is their most valuable asset. If you have a demanding career and family, trying to manage your wealth in the most optimal way is usually very time consuming. ◾ Tax and estate laws: legislation is always changing around taxes, which in turn impacts your estate and finances. It’s difficult to stay apprised and privy to these new rules unless you are constantly staying educated about relevant laws (that’s why it’s a full-time job). SECURE Act 2.0, TCJA potentially expiring in 2025, estate tax exemption rules sun setting, and much more. ◾ Family: If you are the person managing your portfolio and finances, what happens to your wealth once you are gone? This burden falls on your spouse and children, and you better hope they know what they are doing. Unfortunately, there is a common statistic in our industry that roughly 90% of wealth is lost by the third generation… Ouch...However, by building a strong relationship with a trusted advisor, you can potentially help your family avoid this terrible statistic. ◾ Emotions: We are all human, and with that comes behavioral biases. Investing your own money can be very emotional, even for a seasoned investor. When the market is going higher, everyone feels like a genius; and the more you have built up, the larger the swings in your portfolio value. If you have $5MM in retirement assets and you see that drop by 25%, would you feel comfortable on your own to just “ride it out” during the thick of a down-trending bear market? Having the right team guide you during the inevitable declines of the market can help you avoid emotional moves.

When thinking about working with an advisor and financial planner, it is not just about your investment portfolio and asset allocation (even though that’s important too). Brandon Clark, CFP® outlines several reasons why people decide to shift from "do-it-yourself" investing to working with a professional.

The Federal Reserve voted to lower interest rates by a half percentage point, opting for a bolder start in making its first reduction since 2020. The long-anticipated pivot followed an all-out fight against inflation that the central bank launched two years ago. Core inflation is at 2.5% as of August 2024, and the Federal Funds rate will now range between 4.75% to 5%. 11 out of 12 Fed voters backed the cut... Stocks in turn had a volatile trading day. https://lnkd.in/g4ucxT6z

Retirement can be one of the most intimidating moments in your life, regardless of your net-worth or financial plan. A large part of my job is helping executives and engineers retire comfortably 🎯 Here are 3 retirement lessons I’ve learned watching clients retire over the years: ▶ Lesson 1: Retirement is complex (becomes much less complex with the proper guidance) Your portfolio at age 35 most likely should look a lot different than at age 65. Whether you enter retirement with a well-thought-out plan or find yourself thrust into it unexpectedly, the journey is full of complexities that go far beyond financial matters. Roth conversion? Medicare premiums? Social Security income strategies? Portfolio allocation? Inflation? Taxes? These are just a few elements to think about... If you’re feeling overwhelmed by all the questions, challenges, worries, and conflicting information, that’s okay. So has everyone else who’s gone through this transition! Whether you do it on your own or work with an advisor, it's key to take the time to be thoughtful about your plan and strategies for retirement. 🔐 ▶ Lesson 2: Retirement changes over time and will probably be different than you expect Retirement isn’t a static phase of life. It evolves and it has different stages. The early parts are typically when you are the healthiest and most active. It’s essential to embrace this fluidity and stay curious and mentally stimulated. The key is to experiment with your newfound freedom, adapt as you go, and enjoy the ride. No matter how much you plan, retirement will throw some surprises your way. You may find yourself taking up unexpected hobbies, moving to new places, or starting new projects—things you never envisioned in your pre-retirement plans. Remember: You get to decide what retirement means for you. ▶ Lesson 3: Retirement can be the best years of your life Retirement has the potential to be the most fulfilling time of your life, but that doesn’t happen by accident. It’s up to you and your mindset. I’ve seen clients thrive by embracing their freedom and making conscious choices to create the life they want. Traveling, charitable giving (with their time), sporting events, or just watching TV whenever you want: the choice is yours. On the flip side, I’ve also seen people struggle and not feel as fulfilled. No more social cliques at work and work projects to sweat over. The difference often comes down to the mindset and the decisions you make leading up to and during retirement. Our goal is to help our clients maximize their life through wealth planning, and these are just a few of the lessons I’ve learned over the years...

Tomorrow is the day! The Clark Group Asset Management is hosting our Market Outlook in a Presidential Election Year with Vanguard. Make sure to register using the Zoom link below under "event link"