Retirement Planning

Tom Selleck Explains Retirement Income

This approach to retirement planning breaks the "industry" norms and gives you a whole different way to think about your retirement.

A Message from our Founder: Ken Himmler

After 40+ years in helping people retire, I am amazed at how the financial industry still has not changed its ways.

From salespeople calling themselves "Financial Advisor Fiduciaries" and still thinking annuities are the end all be all, to the financial advisor that still uses "Monte Carlo" and a linear way of planning, I just hope I live long enough to see a change which would allow better lives for everyone endeavoring on this critical conversion point in their lives.

Going from the accumulation stage to the distribution stage requires a specialized skill set that the financial industry has lost with stacking cubicles with newly minted CFPS that have no idea on how to help.

Unfortunately the public still cannot tell the different between these cubicle CFPs and highly skilled retirement planners.

Our Unique Approach To Retirement Planning

Mistake #1 In Retirement Planning

Others Method of Risk Testing

Most firms professing to be retirement planners use a software with a tool called Monte Carlo.

This was a valid tool created in the 1950s but has been modified by the financial institutions to give false expectations of your retirement cash flow security.

It is based on the belief that you can run 10,000 scenarios and come up with an average expectation of success.

While Monte Carlo will never show 100%, many advisors are comfortable with between 80% to 95%.

The risk is that you and the markets are not "Average" over a short period of time. Over a 30+ year period of time, yes - a Monte Carlo will revert the returns to the average.

What happens in you are age 65 and you have 15-25 years of life expectancy and the markets drop 50% right after you retire? (This is called a Negative Sequence of Returns).

If this happens you may never recover and you may live your retirement life in a whole different way.

Our Method of Risk Testing

We use a different method.

We use a What-If Scenario system. We test if the markets crashed by 50% in your first two years of retirement - what does your life look like.

Then we start to plan and make decisions around this concept.

This is referred to as First Two Year A-Typical Market Test. This will allow us to see how much risk you can actually take and we start to plan from there.

Others Method of Determining Maximum Spend in Retirement

Most firms follow the Standard for financial planning for retirement cash flow which is to assum a yearly inflation rate increase on your spending. This is called Linear Planning.

Others also look at your retained assets at life expectancy such as age 90-100.

This is a fundamental mistake as after 40 years of planning our founder has learned that this is not a way to live a better life.

This method makes the assumptions that you will be spending the same with only an inflationary increase each year. Read on to see what our founder has learned over four decades.

Our Method of Determining Maximum Spend in Retirement

This is a comment by our Founder Ken Himmler:

Like every other trained financial planner I too planned in a linear method in my first ten years.

I was convinced by the firm I started with that this was the only method.

After a decade I started to see a different story unveiling.

I saw my clients retireing and not living to their fullest life because the numbers showed that they needed to preserve for those ages of between 90-100.

Then I noticed a unique thing, right around age 78-80, my clients spending actually went down - opposite of how I was trained.

This was a natual progession of age, and the loss of mobility, energy and even immunity.

I was disapointed in the financial industry for teaching me this as what I really saw is my clients living at far less then they could have and then their kids inheriting the assets and having the time of their lives.

I developed a new term for my planning of "Bell Curve Planning" as opposed to linear planning.

This new planning method would arrange assets and income to give the maximum spendable income until age 80 and then it would natually reduce by a percentage each year.

This changed everything I knew about planning and I started to see a different outcome from clients.

They were traveling more, buying vacation homes, RVs, boats and planes.

My newly found method also allowed my clients to give more to children and grandchildren while they were alive.

This allows them to see not only how the children will handle money decisions or how grandchildren will treat college when it's paid for, but it also has changed many trusts to change the way heirs get their money.

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