September 2, 2014

Wealth Management - Retirement Planning

How are you helping your clients to avoid being underfunded in retirement?

Florida wealth managers give advice in this special report.

Bob Doyle
President, CIO
Doyle Wealth Management
St. Petersburg

Most often, says Bob Doyle, clients need to invest in something that pays today and grows over time, which leads them to common stocks. “We buy blue-chip stocks that pay a moderate dividend,” he says. He looks for stocks that pay a 2.5% to 3% dividend and have a dividend growth rate of 6% a year or greater.

While 90% of a portfolio can be dividend growth stocks, the rest is in what Doyle calls a bridge portfolio — two to four years of short-term investments such as short-term fixed income.

Doyle recommends investors create a financial plan while they are in their mid-30s. Detailed planning needs to be done at least 10 years from the day a person plans to retire. That 10-year period allows for increasing 401(k) contributions, paying down debts, funding a Roth IRA each year and cutting spending. Waiting to do so until only a year or two out from a target date often means postponing retirement, Doyle says.

Christina Doss
Managing Director for Private Wealth Management, North Florida
SunTrust Private Wealth Management, Jacksonville

“We want to make sure we’re focused on long-term needs rather than reactive to short-term swings.”
~ Christina Doss

To come up with a customized plan for clients, Christina Doss brings in a financial planner, financial adviser and portfolio manager. “We want to make sure we’re focused on long-term needs rather than reactive to short-term swings,” she says.

She recommends stocks for a client in prime income years. For someone in retirement or nearing retirement, she recommends more fixed income but also suggests keeping a portion of funds invested in dividend-paying stocks, which offer opportunity for growth and income.

Fixed-income allocations include more than treasuries. They include investment-grade corporate bonds, international bonds and mortgage- and asset-backed securities and possibly some commodities. The downside of weighting heavily toward fixed income, she says, is the possibility of being underfunded for retirement.

Often, clients want to jump right into an investing strategy. Doss encourages them to instead start with a more comprehensive financial plan. “Without that plan, they are making investing decisions in a vacuum.” This year, taxes and health care costs are going up.

“Having the benefit of a financial plan can help determine if someone must save more or will need to take more risks to meet long-term retirement needs.”

Those with the best chance of adequate retirement income create a financial plan in their 30s, she says. But even those in their 50s or 60s can meet their goals if they trade off-the-shelf solutions for a customized strategy, she says. “It takes a lot of homework and collaborative dialogue.”

Next page:
-- Monte Kane,
Managing Director Kane & Co.

Tags: Banking & Finance, Wealth Management

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