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The Cordant Blog

Why Winging Your Retirement is a Really Bad Idea

by Isaac Presley, CFA on June 14, 2017

Last weekend the Wall Street Journal had a short article titled Beware of Winging Your Retirement that emphasized giving thought to the non-financial aspects of retirement before reaching this major milestone. The upside to those who envisioned and planned for their future? Greater life satisfaction. From the article:

But in talking with and hearing from hundreds of retirees through the years, I have found that those who are most satisfied with their lives spent at least some time thinking and talking about their hopes for the future—typically, several years before retirement itself—and then took specific actions to move closer to those goals.

This is exactly what we do as part of our financial blueprint process to help clients plan for their future. Or, as someone recently described it, we help them integrate their financial plan with their life plan.

But here I want to highlight, in addition to the non-financial reasons, a very important financial reason to stop winging your retirement: the sequence of returns risk.

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Retiring from Intel: Calculating Years of Service, Determining Retirement Eligibility and the Benefits of Being an Intel Retiree (Part 2)

by Isaac Presley, CFA on May 26, 2017

Last time we looked at how to calculate years of service at Intel and the different ways to qualify as an “official Intel retiree.” In part two, we get to the good part as we’ll review the benefits of retiring from Intel. Additionally, we’ll introduce the “Intel Retirement Benefits Calculator” (a free downloadable Excel tool) that will assist you in calculating your years of service and outline what it means for your retirement benefits.

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How to Stress Test Your Financial Plan: A Look at the Key Variables

by Isaac Presley, CFA on May 12, 2017

As any engineer can tell you, sensitivity and stress testing are important tools in determining how a system can fail and therefore, determining the safe usage for that system. When it comes to your financial life, it should be no different. Stress testing your financial plan is an important exercise in determining the health of your wealth. While this a natural inclination for engineers, it can be unclear where to start. Let’s look at the key variables and the impact they have on a financial plan.

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Social Security Income: How to Delay and Optimize for Taxes

by Isaac Presley, CFA on March 22, 2017

We received a couple of questions on our recent post “How to Increase Retirement Wealth With the Right Withdrawal Order” and will address the first one here. (Note: as we mentioned earlier this year, we will be making an effort to address more reader questions on the blog this year, so, if you have questions send them in.)

The question has to do with the issue of taxes. Specifically, is taking IRA distributions before you are required smart given a potential increase in taxes paid on Social Security income or is it better to delay Social Security in the first place. Here’s the question:

What about the effect of taxable income on SS taxes? Or delay SS with additional withdraws from retirement accounts to cover delay in SS?

This question breaks down into a couple of parts: First, how social security income is taxed and second when to start taking it.

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Make an Appointment Now to Update Your Financial Plan for 2017

by Scott Malbasa on March 16, 2017

We know that time doesn’t slow down for anyone, but it’s hard to believe we are already more than two months into 2017. Now that you have settled into the year and have hopefully made some headway on your resolutions, it’s time to get serious about making your finances a priority for the rest of the year.

As you reflect on the financial decisions you made in the past, this is an ideal time to determine new goals and focus your attention on your financial plan to set yourself up for a successful 2017.

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Don’t Let Life Imitate Art When It Comes To Estate Planning

by Scott Gerlach, CFP on March 14, 2017

With #OscarGate squarely in our rear-view mirror, Hollywood can now resume their "normal" lives, and the rest of us can only speculate how the singular moment in the world's most popular award show was botched by someone in the financial services industry. Talk about bizarre. While I'd like to use this space to poke fun at the rich and famous in La-La Land, er, Los Angeles, I'm going to attempt to turn a quasi-movie review into a lesson in estate planning. 

On Christmas day I joined many Americans at the movie theater and saw Manchester by the Sea, starring Casey Affleck (actual winner of Best Actor award). Not your typical uplifting holiday movie (read: depressing), I was struck by one key part of the plot that enabled the rest of the story to unfold. 

The movie unwinds like this: Lee, an irritable, lonely handyman in Boston gets a call one day that his older brother Joe's heart has given out and he needs to make his way back to his hometown, Manchester by the Sea, immediately. Upon Lee's arrival, he learns that Joe has passed away and left Lee as guardian of his teenage son, Patrick. From there, the story focuses on the struggle that Lee faces while trying to cope with his new life as caretaker for Patrick, while also facing the demons that plagued his previous life in Manchester. 

At a critical point in the movie,

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Taking Actions With Tax Planning: Part 2

by Scott Gerlach, CFP on December 15, 2016

Last time in our two-part series Taking Action With Tax Planning we looked at setting up a tax-efficient portfolio and actions to reduce your tax bill while working. In part two, let’s explore actionable steps to reduce taxes during the retirement transition and in retirement.

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Taking Action With Tax Planning

by Scott Gerlach, CFP on December 08, 2016

As humans, it’s in our DNA to crave action in moments of uncertainty. It’s the fight or flight instinct. Because of this, successful investing will always be counterintuitive to many and difficult for most. When it comes to long-term investing, the data and research continue to support an approach that rewards patience and discipline, not action or reaction. Fortunately, not all aspects of managing your wealth require you to resist against our ancient wiring. In fact, when it comes to tax planning, opportunities abound, in all phases of life, to grab the bull by the horns and to act.

Below we’ve provided actionable items for all three phases of your financial life – working, at retirement and in retirement. But, before we get into the three phases, there are a few things you can and should be doing regardless of what phase of financial life you’re in.

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Social Security Planning

by Scott Gerlach, CFP on June 29, 2016

Whether you’re approaching retirement or already in it, you probably have questions about Social Security and how it impacts your retirement plan. Social Security is as complex as it is important. The income stream can be an integral part of a well-thought out financial plan and the myriad of options often lead to sub-optimal elections by otherwise well-informed folks. Social Security goes beyond retirement income and provides workers and their families with disability and survivors insurance benefit as well; however, this post will focus on the following key points of Social Security as part of retirement planning: 

  • How benefits are calculated
  • Solvency of the program
  • Recent changes to popular claiming strategies
  • Social Security as part of your retirement plan

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