Using Age Banding To Estimate How Spending Will Decline In Retirement

The very essence of saving for retirement is to accumulate a nest egg sufficiently large enough to replace the retiree’s employment income and sustain a stable standard of living throughout retirement. If the prospective retiree doesn’t have enough saved up to maintain his/her lifestyle for the next several decades, it’s not yet time to retire. Yet a growing volume of research studying the actual spending habits of retirees is revealing that this traditional approach may not be entirely appropriate after all. Because as it turns out, retirees don’t actually maintain a stable lifestyle in retirement; instead, spending levels tend to decline (in real terms), as the retiree goes from the “Go-Go” early years of retirement, to the “Slow-Go” years, and eventually the “No-Go” years. In addition, not only does retirement spending slow in the later years, but the underlying composition of the retirement spending begins to shift as well as clients cross through these “age bands”, as spending on housing and entertainment activities fall significantly in the later years, while health care expenses are rising. Still, though, discretionary spending tends to fall by more than health care expenses rise – leading to an overall decrease in retiree spending as retirees proceed through…


Staff Spotlight: Meet John Strasburger

In our most recent staff spotlight, we had a conversation with John Strasburger, CFP®  a Wealth Advisor on our team at Capital Planning. During our discussion, we discovered that John holds a deep appreciation for one European country, loves everything baseball, and has some serious musical skills.  Learn more here: What’s the best place you’ve traveled to?Switzerland is without a doubt the best place I've ever traveled to. My wife and I went there for our honeymoon and it was a trip we'll never forget. We even kept a journal of our experiences along the way. One of our main goals was to stay away from the touristy locations and instead immerse ourselves in the local culture. We visited Geneva, Grindelwald, Lauterbrunnen, Zermatt, and Lucerne, and discovered that some of the most memorable places were the quaint towns and villages we stumbled upon. Everywhere we went, we were amazed by the stunning landscapes and the friendliness of the locals. The views of the Swiss Alps were truly breathtaking, and we felt grateful to have had the opportunity to experience such natural beauty. We left Switzerland feeling refreshed and inspired, and we can't wait to go back and discover more of its…


Alternative Investment Outlook: Helping Navigate Through The Inflection Point

The first half of 2023 was a meaningful period in many aspects after a difficult year in 2022. Global inflation figures finally started to come down, economic activity started showing early signs of slowing, and the Fed moderated its hiking steps while remaining hawkish. We believe most central banks are at the final stages of rate hikes or even at the beginning point of easing (e.g., China) as their focus moves from inflation to recession. That said, the timing and the steps they will take after the shift are greatly data dependent, leaving the market with many uncertainties. This, combined with the lagged impact of rate hikes which will become more apparent down the road, may keep market volatility at an elevated level with many twists and turns, and dispersion will likely continue across the asset classes, sectors, and quality of the assets.With this in mind, we remain constructive on alternative investments, which can provide a source of alpha that is uncorrelated to the traditional market, downside management, and diversification for investors’ portfolios. We, however, also want to note that greater dispersion of performance is expected among managers depending on their trading style, sector, or geographical focus, even within each…


The MOVEit Security Breach and Protecting Your Identity

We have recently received several questions from clients & colleagues about news related to the MOVEit security breach.This article contains some more information about what happened, what to do if you were affected, and also some general information on data security and identify theft.What happened?In May 2023, a zero-day vulnerability was discovered in MOVEit, a managed file transfer software used by thousands of organizations around the world. The vulnerability was exploited by the Russian ransomware group CL0P, who stole data from over 340 organizations and 18 million individuals. The organizations affected include educational institutions, government agencies, healthcare organizations, and businesses of all sizes. It’s recommended that organizations that use MOVEit should apply the latest security patches and review their security policies to ensure that they are adequately protecting their data.What can you do?If you were affected by the MOVEIT Security Breach, there are a few things you can do to manage a case of identity theft:Contact your professional service providers including your advisor, accountants, etc. Let them know what happened so they can prepare accordingly.Place a fraud alert on your credit report. This will let creditors know that you may be a victim of identity theft and require them to…


Commodities and Currencies Midyear Outlook

Commodities Outlook: Global Slowdown Concerns And Prospects For RecoveryAs the possibility for China’s reopening finally became a reality, analysts cautioned that the demand for industrial metals from the world’s second largest economy would help ignite a bout of inflation. Initially there was a delay in economic activity, as COVID-19 cases escalated once Beijing authorities lifted strict testing and lockdown measures. And as outlined by Communist Party leadership at the National People’s Congress (NPC) in early March, the target for 2023 economic growth would be “around 5%.” That target is less than what analysts had projected, and predicated on personal consumption since there was no indication of large infrastructure projects requiring industrial metals on a large scale.In terms of China’s long established requirements for crude oil and crude oil products, as the world’s largest importer of oil, projections for crude oil prices were lifted as expectations that domestic and international travel, and manufacturing activity, would pick up markedly.But concerns that the global economy was nearing the cusp of a downturn placed significant pressure on oil prices, despite a significant cut in production by OPEC+. According to OPEC+ officials, they will continue to monitor prices and adjust production based on demand, with…


Geopolitical Outlook: A Shifting Global Dynamic

We’re more than six months into 2023 and the global dynamic has shifted. An attempt by Chinese President Xi Jinping to forge a negotiated settlement to end the Russia-Ukraine conflict was thwarted by an unflinching determination by both sides to win at all costs. An ally of Vladimir Putin, Xi is the latest world leader to offer a framework for a cessation to the fighting, but so far it has been met with caution and suspicion given China’s current relationship with Russia. That Xi has emerged onto the world stage, following China’s nearly three year COVID-19-related shutdown, and is enjoying praise for his successful peacemaking deal between Saudi Arabia and Iran, lends credibility to his attempt to broker an accord between Russia and Ukraine. The deal also helps underpin China’s unrelenting determination to establish a global leadership position, as it seeks to broaden its trade and political relationships, and weaken the economic authority of the U.S. A major component of China’s global outreach includes a determined effort to destabilize the U.S. dollar as the still uncontested primary global reserve currency, while it seeks to legitimize and install the yuan as a major reserve currency. Moreover, as China continues to build…


Bonds Outlook – Balancing Opportunities with Objectives

As noted previously, short-term interest rates are at levels last seen in the early 2000s. Moreover, due to the elevated fed funds rate and the subsequent carryover into the U.S. Treasury market, the Treasury yield curve is the most inverted since the early 1980s. That is, shorter-term Treasury securities outyield longer maturity securities. This has finally allowed investors to generate a return on cash. But economists like to remind us there is no such thing as a free lunch. In investment parlance, that just means all investments carry risk, even cash. So where is the risk that economists warned us about? The big risk with cash is reinvestment—that the currently elevated rates won’t last and upon maturity, investors will have to reinvest proceeds at lower rates.The Fed’s goal has been to take the fed funds rate into restrictive territory to make the cost of capital prohibitively expensive to slow aggregate demand, which should allow inflationary pressures to abate. Then what? Well, after winning its fight with inflation, markets expect the Fed to start cutting rates early next year. After keeping rates at these elevated levels, the Fed will then likely take the fed funds rate back to a more neutral…


Intern Spotlight: Meet Ty Everitt

In our latest spotlight, we take a different approach and speak with the now youngest member of our office,  intern Ty Everitt.   We found out that not only does he have an affection for a certain sport and winter holiday, but also that his favorite part of our meetings MIGHT just be the food that comes with it. Learn more from the FULL spotlight here: What was your first paying job? My first paying job was giving baseball lessons. I was 16 at the time and wanted to earn money to buy a car. Baseball is something I’m passionate about and I enjoy sharing my knowledge, so giving lessons was a no brainer. I gave multiple lessons a week working with kids on their hitting, pitching, and defense. My favorite part of it was getting to know each kid individually and developing a relationship over our common interest in baseball. What sort of duties do you have at work? I handle duties at Capital Planning ranging from organizing our clients’ information in our online files to picking up lunch for the office from a local restaurant. I take pride in doing a lot of the back-end work for the office.…


Stocks Outlook – Evidence Points to Modest Gains

Stocks Outlook: Weight of Evidence Points to Modest Gains Outlook 2023: finding balance conveyed the difficulty equity markets had in 2022 making the transition from a market driven by macroeconomic risks to one focused on business fundamentals. In the first half of 2023, progress was made toward better balance as inflation fell and interest rates stabilized, but macroeconomic risks remain top of mind as a potential recession looms. History Often Rhymes We discussed some favorable historical seasonal and cyclical patterns in Outlook 2023. One was the average 10% gain for the S&P 500 in the 12 months following the end of a Fed rate hike cycle. Another was the stock market’s impressive track record following a down year, with an average gain of over 15% the following year, and gains in 15 out of 18 of those years. There are several indicators that help put the current market environment into perspective and suggest additional, but likely modest, gains may lie ahead [Image Below]. One historical precedent that suggests a bumpier ride for stocks is the average performance before the start of a recession. Specifically, the S&P 500 has fallen 1.4% on average during the six months before the start of…


Economy Outlook – A Moving Pendulum

A Moving Pendulum in a Seemingly Stable Financial SystemFrom interest rates and inflation to the job market and recession, we anticipate there will be a number of shifting elements in the economy for the remainder of the year and potentially into 2024. At the May meeting this year, the Fed increased its policy rate for the tenth consecutive time, pushing the upper bound of the fed funds rate to 5.25%, the highest since August 2007. The Fed’s aggressive rate-hiking campaign has been a focus for investors for over a year. Frankly, investors are probably ready to move on from the Fed being the centerpiece of most conversations.We expect the Fed to change strategy during the latter half of 2023 for at least two reasons. First, the Fed should have less pressure to react to a tight labor market as the job market is set to cool throughout the remainder of the year. And second, the Fed will likely be less concerned inflation could get out of control from sticky-services inflation, since we expect services prices to ease. One nagging inflation component that will ease in the coming months is rent, as a record number of new apartment units under construction…

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10 Steps To Ensure Financial Security in Retirement

Planning for an unpredictable future can feel overwhelming, with so many decisions to make it can be hard to know if you're going to have enough money to support yourself through retirement.

In this guide, experts from the Capital Planning Team have simplified the 10 steps you can take, so that you can live a life without worry, sfe in the knowledge that your financial future is secure.