Broker Check

Spring is in full bloom

April 09, 2024

Here’s what I know….

If you have $100,000 in an account earning 6% and you take $400 out per month and increase the monthly amount by 3% each year to keep up with inflation, the account will last 33 years and 7 months.  That’s math and reflects information at one point in time.

Here’s what I don’t know…..

  1. I am not sure of your future tax situation and how the distribution will be affected by your tax bracket.
  2. 6% return is fairly conservative and some years it will be higher and some years lower. The market goes up and down.  This will affect how long the money lasts.
  3. Though 3% inflation seems reasonable over time, the last few years have shown us that inflation can be much higher. This also will affect how long your money will last.
  4. Can you live on $400 per month before tax? If you need more, you will need to save more.  If you change the distribution to $500 per month, you cut 10 years off the account lifetime.

Here’s what we do at Harvest Financial

  1. We ask a lot of questions, get a bunch of information from you, and then we do math.
  2. We put our 30 years of experience towards providing advice on tasks you should carry out to make the financial plan work. This includes things like savings rates, rate of return and discussions about life insurance, long term care and estate planning which could protect your assets.
  3. We are available to update your plan as circumstances change, and perform annual reviews given market ups and downs.

As of this writing on April 8, the S&P 500 is up 9.11% for the year.  We saw lots of ups and downs last week and expect more as the political year continues and various international events conspire to ruffle feathers in the market (more up and down).  Three people I do not chose to be are Donald Trump, Joe Biden and Mike Johnson.  Each is walking their own tight rope and trying to keep their lives and jobs from falling.

In terms of importance, we married off daughter #2 last week and were thrilled to have lots of family around for this celebration.  We love our new son-in-law and wish them much happiness in their future.  The team here at the office kept things moving without too much upsetting of the apple cart.  We will work on making time away better for you, our client.  Time away is critical to clear out the mind and explore new ideas.  However, we are committed to helping you as best we can, whether we are in or out of the office.

Spring is in full bloom. Enjoy the beauty wherever you are in the US and feel the sunshine on your face!

The hypothetical investment results are for illustrative purposes only and should not be deemed a representation of past or future results. Actual investment results may be more or less than those shown. This does not represent any specific product [and/or service]. 2) S&P 500 – A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. 3) The views stated in this letter are not necessarily the opinion of Cetera Advisors and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.