Fisher Investments 15 Minute Retirement Plan

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How To Manage Your Fisher Investments

A Primer On Asset Allocation and Time Horizon From Fisher Investments

If youre uncomfortable managing your own investments, and youre not keen on the robo-advisor trend, Fisher Investments might be for you. They provide the same comprehensive investment management you get with robo-advisors, but they do it with a human touch. And rather than investing your money in passive assets to merely track the markets, they actively seek to give you a better performance.

Fisher Investments is one of the largest independent wealth management firms in the country. The company began operations in 1979, and as of March 2019 has $107 billion in assets under management. They serve more than 5,000 private clients and over 175 large institutions . With offices in California, Texas and Washington, the firm also has two wholly owned subsidiaries in Britain and Germany.

Founder, Executive Chairman and Co-Chief Investment Officer, Ken Fisher, is the heart and soul of the firm. His Portfolio Strategy column ran in Forbes from 1984 to 2017. He has a personal net worth estimated at $3.6 billion. He has authored 11 books, and has been listed as one of the 30 most influential people in the investment advisory industry over the past 30 years by Investment Advisor magazine.

Fisher investments is a fee-only investment firm. That means you pay a flat fee for investment management, rather than fees based on individual investments or trades. This ensures that Fisher Investments is working first and foremost in your best interests.

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Buffett’s Simple Fund Portfolio

Buffett has long been a fan of index funds, once placing a $1 million bet for charity that index funds would beat a group of hedge funds managed by sophisticated investors. His rationale for favoring index funds is relatively simple: The average market participant will only earn a return equal to the market average minus fees. Fees are the only input you can control with certainty. The lower the fees, the more likely you are to earn a higher return.

At the 2004 annual meeting with his investors, he said, “Among the various propositions offered to you, if you invested in a very low-cost index fund — where you don’t put the money in at one time, but average in over 10 years — you’ll do better than 90% of people who start investing at the same time.”

And while Buffett’s portfolio may be pretty simple — most investors hold more than only two funds — the underlying message is important. Simplicity works. Studies by S& P routinely confirm that over multi-year periods, higher-cost actively managed funds fail to outperform. In a 2016 study, fewer than 18% of large-cap stock funds kept pace with the S& P 500 index over the preceding 10-year period.

For individuals, the most important part of the personal finance pie is not financial at all. It is behavioral. It is the ability to invest regularly, and ignore the desires to sell in fear of loss or change your buying when you fear missing out on the next bull market.

Calculation Of Other Income Sources

A comprehensive retirement plan will also consider your various sources of potential income in retirement. How much money youll continue to earn can make certain investments more or less attractive, depending on their tax exposure or required minimum distributions. Common categories of non-investment income to consider when planning for retirement include:

  • Salary
  • Social Security
  • Passive Income from Business Interests and Real Estate

The difference between your total income and your total expenses is your net savings. Easy, right? If your net savings is a negative number, your portfolio will have to generate enough monthly cash flow to cover the difference or it will start to shrink. We are careful to account for this factor when advising clients about their retirement plans, as it can dramatically affect which vehicles offer the best benefits.

*Source: FactSet, Inc., as of 2/11/2016. Based on annualized S& P 500 Total Return Index returns from 12/31/1925-12/31/2015

**FactSet, as of 03/08/2016 from 12/31/1925 to 12/31/2015, average annualized inflation was 2.90%, based on the US BLS Consumer Price Index

***Estimate based on a 2.90% rate of inflation.

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Learn More About Buffett’s Two

This article was updated on Feb. 7, 2017, and originally published Jan. 6, 2016.

If Warren Buffett weren’t the world’s best stock picker, how would he plan for retirement?

Luckily for the rest of us, he’s answered this question before. In an annual letter to shareholders, Buffett laid out a retirement plan that would take just minutes to implement in a 401 or IRA. He believes in it so much that his own money will ride on it. It’s the plan for managing the wealth he’ll leave behind to his wife:

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S& P 500 index fund. ) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers.

Buffett suggests the Vanguard S& P 500 index as one of the best funds for investing in U.S. stocks. And although he doesn’t offer up a specific suggestion for short-term government bonds, the Vanguard Short-Term Government Bond Index Fund fits the basic requirements.

Who Is Ken Fisher

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Ken Fisher was an investment columnist for Forbes magazine from 1984 to 2017. He has written 11 books, as well as research papers in the area of behavioral finance. He currently writes for several publications including USA Today, Financial Times, Borsen in Denmark, DE Telegraaf in The Netherlands, and Focus Money in Germany.

In 2018 he was determined to be worth $3.6 billion and is on the Forbes 400 list of wealthiest Americans. Investment Advisor magazine has listed him as one of the 30 most influential people in the investment advisory business for the past 30 years.

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Let Us Help You Achieve The Retirement You Deserve

Contact us to learn how we’ve helped thousands of successful people retire comfortably.

Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations.Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations.

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Why Fisher Investments Thinks Retirees Shouldnt Shun Stocks

Paid for and posted byFisher Investments

9 Min Read

Conventional wisdom holds that when approaching retirement, investors should change their approach. With paychecks ceasing or shrinking, many see retirement as a time to shift away from growth-oriented investments, like stocks, and toward income-generating assets with lower short-term volatility, like bonds. But in Fisher Investments view, retirees should approach such decisions cautiously. In reducing short-term volatility risk associated with stocks, those who rely too heavily on bonds and cash may unwittingly increase the risk they run out of money too soon, defeating the general purpose of retirement investing. Understanding these trade-offs is critical, in our view.

Such thinking involves a major flaw, in our view: Todays retirees live longer than everand many need their portfolios to generate solid growth so they dont run out of money. Consider: The US Social Security Administration projects todays 65-year-old American males will live an average of 18.1 more years for females, the figure is 20.7.That is merely the averagemeaning many likely live even longer. Lifespans should only rise going forward, too, as medical advances continue. By 2050, the Social Security Administration projects US male 65-year-olds will live another 20.1 years on average, with females living another 22.4 years.

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Default Income Replacement Rate

Although everyone is different, as a general rule, most people require about 80% of their preretirement income to maintain their current lifestyle during retirement. That means if you make $50,000 a year right before retirement, youll probably need about $40,000 a year during retirement. Most peoples required retirement income is lower because theyre no longer paying the costs of working , tax bills are usually lower, mortgages may be paid for, and children likely no longer require financial support.

Plan Ahead With Our Retirement Planning Calculator

Fisher Investments Explains Why You Need a Financial Date Night | Market Insights Podcast Excerpt

If youre like many investors, you may find retirement planning complicated and nerve-racking. It means wading through piles of paperwork , sorting through financial statements, thinking about your long-term health and making estimates about whether you will be able to live your life comfortably. You might even wonder if you can ever stop working.

Forecasting capital markets is never an exact science, so proper retirement planning should account for a variety of outcomes. That is where our online Retirement Planning Calculator can help. It easily estimates how certain changes can affect your retirement income, allowing you to consider different scenarios and whether youll have enough to support your lifestyle. Enter a few key variables, such as your current savings and expected performance of your investments, and our calculator quickly estimates how much annual income you can withdraw in retirement. Change any aspect, and the calculator adjusts accordingly.

While the results are strictly hypothetical, our Retirement Planning Calculator can help answer the following questions:

Keep in mind these important points when using our calculator:

*The contents of this article should not be construed as tax advice. Please contact your tax professional.

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Determining Your Retirement Plans Investment Time Horizon

The next critical step in constructing your realistic retirement plan is figuring out how long your assets need to lastotherwise known as your investment time horizon. Often, people assume this is going to be their life expectancy, but weve found this can be too narrow. For example, those with a spouse may find that a retirement plan based only on their own time horizon leaves their partner at risk, particularly if that spouse is younger or is likely to live longer.

To illustrate, Exhibit 1 shows the Social Security Administrations life expectancies for Americans based on current age. No one wants to be poor later in life because they didnt think they would still be alive, or leave a partner in this situation. To this end, its important to make your retirement plan match the longest realistic time horizon youre likely to face. Our teams experience working with thousands of clients has provided us insights into many of the issues investors overlook when considering time horizons, so we can help you avoid overlooking important considerations that may impact how long your nest egg will need to last.

Exhibit 1: If Youre 65 Today, the Probability of Living to a Specific Age

How will withdrawals and inflation impact my portfolio?

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If Warren Buffett weren’t the world’s best stock picker, how would he plan for retirement?

Luckily for the rest of us, he’s answered this question before. In an annual letter to shareholders, Buffett laid out a retirement plan that would take just minutes to implement. This is the very two-pronged plan he outlined for governing the trust he’s leaving behind for his wife:

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S& P 500 index fund. ) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers.

Buffett suggests the Vanguard S& P 500 index as one of the best funds for investing in U.S. stocks. A good fund for short-term government bonds can be found under the same roof. TheVanguard Short-Term Government Bond Index Fund should fit investors just fine for this purpose.

A plan built on these two funds would be as inexpensive as it gets. Combined, a 90% mix of stocks and 10% bonds purchased through Vanguard would result in annual fees of just 0.055% of the account balance, amounting to $55 per year on a $100,000 investment, if invested in the least expensive variant of the funds. By contrast, the average fund is still 20 times more expensive than Buffett’s two fund solution.

Invest like Buffett with 11 simple rules

The results were impressive.

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Myth #: Invest In Fixed Interest For Safety

Conventional wisdom might suggest you should increase your fixed interest investments as you age. The thinking goes, the older you are, the more you need to protect the wealth you already have rather than pursue more investment growth. However, depending on factors such as health and family history, someone retiring at age 60 might reasonably expect to live for another 30 years or more. If you need long-term portfolio growth in retirement to achieve your financial goals, avoiding more-volatile, higher-returning assets like equities could increase your risk of falling short of those goals.

Plan For The Retirement Youve Earned

Fisher Investments 15 Minute Retirement Guide

Your retirement plan matters. Done right, it can set you up to enjoy a retirement without financial worry. Done wrong or not done at all and you may find yourself in a less comfortable situation.

Fisher Investments offers a variety of services and free resources to help you retire comfortably.

Schedule a Free Consultation

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Educational Guides For Financial Planning

Managing your investment portfolio and developing a financial or investment plan to meet your goals are massivepotentially dauntingresponsibilities. The amount of information available can be overwhelming at times regardless of your investing experience. Not knowing when and where to start investing can deter some beginners who keep putting it off.

Whether you have invested your own finances or have turned things over to a professional, Fisher Investments Canada has produced a series of helpful investment guides designed with you in mind. We created these free guides to help curious investors develop a positive approach to investing and provide them with the tools they need to invest wisely and achieve their long-term investing goals.

In this article, well discuss just a few of these guides we think you might find useful.

Fisher Investments Disciplinary Disclosures

Fisher Investments has not faced any disciplinary events or material legal events, nor has any action been taken against any management person at the firm. The firm currently has a clean disciplinary disclosure record.

When a firm registers with the SEC, it needs to report any criminal charges, regulatory actions or legal actions like liens or civil judgments that have been taken against them within the past decade. These are called disclosures and must be listed on a firms Form ADV filed with the SEC.

For more information, visit Fisher Investments Investment Adviser Public Disclosure page.

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Fisher Investments believes you need to start thinking about retirement now so you can plan the retirement you want. You’re invited to call and receive a 15-minute retirement plan.

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A Look At The Founder Of Fisher Investments

Social Security Answers You Need to Know

Founder Ken Fisher is well-known in the investing space. He currently serves as Fisher Investments executive chairman and co-chief investment officer, and previously served as CEO for 37 years. Fisher is the author of 11 financial books, including four New York Times bestsellers, and is also the longest-running columnist in Forbes history.

Fisher owns more than 75% of the shares of Fisher Investments.

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Fisher Investments Client Types And Minimum Account Sizes

As mentioned previously, Fisher Investments private client base is mostly high-net-worth individuals. It also works with less affluent investors plus corporations, retirement plans, public and multi-employer pension funds, foundations, endowments, governments and investment companies.

Fisher Investments generally works with clients who have at least $500,000 in investable assets, though its WealthBuilder accounts, which are approved on a case-by-case basis, require a much lower minimum of $200,000. Additionally, the firm accepts smaller account sizes at its discretion, though these accounts – as well as all WealthBuilder accounts – will be subject to a higher fee rate of 1.50%.

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