"Advisor Perspectives" Articles

Weekend reading managing retirement taxes using effective marginal tax rate Weekend reading managing retirement taxes using effective marginal tax rate
Weekend Reading: Managing Taxes in Retirement using the Effective Marginal Tax Rate

To create a “tax alpha” retirement plan, your focus should be on leveraging tax-saving strategies that maximize your after-tax returns.

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Weekend Reading: Guaranteed Lifetime Income is a Better Solution than Taxable Bonds

Interest rates might be at 20-year highs, but you can utilize this current economic environment to your advantage through the use of guaranteed lifetime income solutions, such as annuities or insurance products.

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Weekend Reading: Three Myths About the Bond Market

With interest rates creeping up over the past 18 months, what impact does that create for bonds in your portfolio?

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Weekend Reading: Do U.S. Investors Underestimate Risk?

It’s become common practice to utilize U.S. historical data when projecting the resilience of your financial plan. However, this can potentially underestimate the risk of a significant market crash, as relying solely on U.S. data may lead to an inaccurate perception of downside risk.

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Weekend Reading: The Case for Tax Adjusting a Portfolio

From the moment you enter the workforce and into retirement, you’ll find that all of your earned dollars are in fact not all yours. One way or another, Uncle Sam wants his share, so it’s crucial to consider the different values of your money based on tax implications.

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Weekend Reading: How to Get Clients to Spend More Money

You spent decades stockpiling savings for retirement. After years of frugality and budgeting, however, flipping the switch to then spend those hard-earned dollars isn’t for the faint of (penny pinching) hearts.

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Weekend Reading: The Four Unique Risks in Decumulation

The transition from accumulation to decumulation mode can be one of the biggest challenges for retirees. In addition to requiring a mindset shift, it also presents unique obstacles that should be considered as part of your retirement planning process.

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Weekend Reading: Five Things to Evaluate in a Tax-Managed Investment Strategy

Albert Einstein once said, “The hardest thing in the world to understand is the Income Tax.” Beyond being complicated, there is no way to avoid Uncle Sam’s share of your appreciated assets.

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Weekend Reading: Managing Taxes in Retirement: Income Thresholds versus Incremental Average Tax Rates

Here, past podcast guest, Wade Pfau, highlights how to strategize the withdrawal order between your three tax buckets (taxable, tax-deferred, tax-exempt) by utilizing two different distribution methods: The adjusted gross income (AGI) threshold strategy versus the incremental average tax rate method.

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Weekend Reading: Why Volatility is the Wrong Measure of Investment Risk

According to the 1950-era modern portfolio theory, volatility is the most appropriate measure for portfolio risk. It draws down to utilizing the statistical concept of standard deviation; but while this makes the metric mathematically simple and easy to estimate, it also carries some disadvantages.

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Weekend Reading: How to Think About Annuities

Should you love or hate annuities? To reach a thorough conclusion, answering this question involves a bit of introspect and research. Above all, it’s important to keep in mind that no investment vehicle is perfect, and oftentimes, popularity will shift based on behavioral finance and current economic conditions.

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Weekend Reading: How to Plan Retirement Income for a Constrained Investor

To determine if you are a constrained investor, you would calculate the ratio of your minimum annual living expenses to the value of your net investment assets. If the outcome is more than three percent, you could be classified in the constrained category.