Is Your Retirement Portfolio Strategically Managed? It Should Be.
By John Halterman
You may hear financial gurus toss around the phrase “retirement portfolio management strategies” as if everyone has a concrete idea of what that means. But connecting the gap between the reason for your strategies (the goals you have for your future) and the actual decisions you make with your investments is a pretty daunting task for non-financial experts.
Nevertheless, your decisions about the assets and allocations in your portfolio should be strategic. Retirement planning is a huge undertaking: you want to enjoy these years to the fullest without risking the possibility that you run out of money in your lifetime. Below we share the conversations we have with our clients to begin developing their own custom wealth strategies.
Step 1: Define the End Goal
We believe the first step to retirement planning is to figure out the exact lifestyle you want to lead in retirement. Are you enthusiastic about traveling and seeing the world? That’s going to require a certain amount of wealth to fund. Would you rather stay close to home and play with your grandchildren in a home big enough to entertain? That lifestyle comes with costs of its own.
No matter your vision for your retirement years, we know that understanding this vision first is important because this will be the driving factor for every decision you make regarding your wealth strategies. We first determine the income needed to support your desired lifestyle, then we strategize the sources you’ll be using to generate that income.
Step 2: Define Risk Capacity & Portfolio Objectives
Next, we dig into your specific characteristics. We believe you need to manage risk before growth, so we work to define your risk capacity first and foremost. The economy will always change and dealing with volatility will always be a part of investing, but there are risks no matter what you choose to do with your money. (Even keeping too much in a savings account is risky due to inflation.) Still, we aim to minimize risk, so learning about your risk capacity is an integral part of your investment strategy.
Then we determine the objectives for the portfolio, which underlines the goals for the portfolio itself. Will this be an income portfolio you withdraw from for the rest of your life, or do you plan to leave money to your children or a charity you care about? Do you want growth or are you just looking to protect what you have? If the goals for the portfolio involve intentions that exceed your lifetime, we know additional tax strategies for asset transfers will need to be taken into consideration.
Step 3: Build Your Portfolio Around These Parameters
Knowing your risk capacity and the portfolio objectives you’ve planned for your portfolio allows us to now begin designing specific strategies that are most likely to help you pursue the goal(s) you defined in Step 1 and Step 2. It is the combination of these two factors that inform the need for strategic portfolio management.
At Beacon Wealth Management, we are not buy-and-hold money managers and do not believe in static allocations or diversification. We believe this strategy carries too much risk because you’re putting too much trust in the markets, which are volatile by nature. We are tactical portfolio managers and are always willing to change your portfolio allocation based on the current state of the economy. Our goal is to optimize market conditions rather than ride them out.
We also focus on reducing client taxation as much as possible, so this is a key part of our conversation. We design your investment strategies to be in perfect alignment with your withdrawal needs and other sources of income in retirement so you’re not paying more than your fair share in taxes.
Step 4: Don’t Forget to Factor In Other Risks
Finally, retirement isn’t just about having enough money to enjoy your lifestyle. You must always have a plan for catastrophic events such as death, disability, long-term care, incapacitation, rising healthcare costs, or whatever cruel event life decides to throw your way. Our holistic wealth strategies also take into account these possibilities as we actively manage downside market risk in your portfolio.
How We Help
John Halterman, best-selling author and nationally published blogger has been featured as a financial guest expert on the TV shows of self-help gurus Brian Tracy and Jack Canfield, author of Chicken Soup for the Soul. He has appeared on ABC, FOX, BRAVO, NBC, CBS, and A&E. John is the expert host of the weekly WDTV News 5 segment, “Solutions 4 Financial Independence.”
As an authority on wealth management, he has been invited by hundreds of institutions such as universities, federal agencies, professional associations, and large energy and utility corporations to be a guest speaker and educational event host. Event topics include maximizing your retirement, managing down market investment risk, how to reduce your tax burden, and transferring your family wealth in the most tax advantageous way.
John is the founder and owner of Beacon Wealth Management, specializing in helping entrepreneurs, professional practitioners, and retirees overcome the 4 major challenges facing successful families. He is a warm communicator with a passion for helping people transform their financial futures. John understands the multifaceted set of financial worries people face as they become more successful and enter the retirement red zone. He empathizes personally with each client and delivers a collaborative client experience that empowers people to reach their life goals.
With more than two decades of experience, John’s professional credentials include:
Certified Wealth Strategist (CWS)
Accredited Investment Fiduciary® (AIF®)
Certified Estate Planner™ (CEP®)
Chartered Federal Employee Benefits Consultant℠ (ChFEBC℠)
Professional Plan Consultant® (PPC®)
Registered Financial Consultant (RFC)
Past member of Ed Slott’s Master Elite IRA Study Group
A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a Wealth Advisor. Today, he resides with his family in Bridgeport, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-loving man, he enjoys giving back to his community, coaching youth sports, landscaping and architectural design, WV Athletics, and is an outdoor and racquetball-playing enthusiast.