Retirement mind shifts: Be prepared so you can change your mind

CookPaul-150-x-150Paul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

If you’ve ever experienced a mind shift, you know what is meant by the saying, “there’s nothing as powerful as a change of mind.” This “ah ha” moment or mind shift is a change in focus and perception of a problem, situation, or potential solutions. Some mind shifts happen after experiencing a lightning-strike-like insight, while others evolve over time.

Recent research suggests that many individuals experience a mind shift as they approach retirement, resulting in a retirement earlier than planned and no transition period.

Retiring early  

In MassMutual’s study, Hopes, fears, and reality: What workers expect in retirement and what steps help them achieve the retirement they want, nearly half (45%) of the respondents said they retired earlier than planned.[1] In their younger years, the respondents said they believed they would work as long as possible. However, as time evolved, they changed their minds, experiencing a ‘work can retire you’ mind shift, leading them to retire early. Other factors also contributed to the number of retirees who retired earlier than planned. Changes in technology and changes at work were among the primary reasons people chose early retirement. A fair number (39%) of respondents retired early because they could afford to do so.

Even though they didn’t retire how and when they wanted, 79% of the survey respondents had no regrets about retiring when they did.

Scrapping the transition 

Many pre-retirees expect to gradually ease into retirement, or find other work once retired. A gradual transition, however, was not in the cards for the vast majority of those surveyed.  Seventy-one percent of the survey respondents stopped working all at once. They also found several barriers to re-entry into the workforce once retired, including an inability to keep pace with technology, and age discrimination.

A transitional or gradual approach appeals more when further from retirement. The closer the retirement date becomes, the more likely respondents were to say they would stop work all at once. When retirement is 11-15 years in the future, only 29% thought they would forgo a transition and retire “cold turkey.” When retirement was five to 10 years in the future, 35% said they would stop working all together at retirement, and when retirement was only five or fewer years in the future, over half (52%) said they would not continue working on any basis in retirement.

These survey results underscore the need to start saving for retirement early so you have a strong financial foundation in place well before your targeted retirement date. With a suitable financial backdrop, comes the financial freedom to abandon plans to “stick out” work until a certain target retirement date. Instead, you could follow through on your mind shifts, reimagine your retirement to focus on outcomes, and pursue new goals and opportunities.

Brinker Capital Retirement Plan Services works with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987. To learn more about Brinker Capital Retirement Plan Services, call us at 800.333.4573.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.

[1] “Hopes, fears, and reality: What workers expect in retirement and what steps help them achieve the retirement they want” MassMutual 2016.

Top blog posts of 2017

We’re closing out the year with our top five blog posts of 2017. From retirement and behavioral finance, to in-depth market perspectives, these are the best of 2017. Enjoy!

Jeff Raupp, CFARaupp_Podcast_Graphic, Director of Investments

Investment Insights Podcast: Where markets go from here now that they’ve rallied post-election

 

 

CookPaul-150-x-150

Paul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

Avoiding retirement regrets

A dozen steps to a smooth transition to retirement

 

Crosby_2015-150x150Dr. Daniel CrosbyExecutive Director, The Center for Outcomes & Founder, Nocturne Capital

Can money buy happiness?

Purchasing power and the big power of small changes

Avoid the pain of regret: a disciplined approach to retirement savings

Marino_R 150 x 150Roddy Marino, CIMAExecutive Vice President
National Accounts & Distribution

With 39 percent of Americans feeling ill-prepared for retirement, according to the Employee Benefit Research Institute’s 2017 Retirement Confidence Survey, we are often challenged to come up with a solution to make saving easier.[1] Unfortunately, there are no easy solutions, and in the absence of unplanned windfalls, there are no shortcuts. There are, however, strategies that will help you overcome behavioral impediments by infusing discipline into your retirement savings plan. Here are six strategies to consider:

  1. Automate the process. The best way to make retirement savings a priority is to put it on autopilot, so each time you get paid you save for the future without giving it much conscious thought. If you have an employer-sponsored retirement plan, arrange for a percentage of your pay before taxes to go directly into your retirement account. Also, commit to increasing the percentage you allocate to your retirement account every time you get a raise. The impact of automated savings plans to net pay is often far less than anticipated, and after time it goes somewhat unnoticed. The impact on your nest egg, however, could be quite significant.
  2. Make it binding. Make your future self a promise to refrain from withdrawing any money from your account before retirement. The best way to protect your retirement account is to establish a separate emergency reserve fund. It is typically recommend setting aside six months’ worth of income to cover unexpected expenses like uncovered medical costs, home repairs, or other unplanned surprises. With an emergency fund, you have a resource to fund whatever immediate needs arise without tapping your retirement account or delaying your savings goals.
  3. Pay your future self what you paid your creditors. After you’ve cleared an outstanding debt, consider “continuing” those payments by making deposits into your retirement account. For example, if you pay off a car loan that previously cost you $500 a month, allocate that same amount to your retirement account.
  4. Establish a home for “found” money.  It’s not uncommon for someone to view inheritances, tax refunds, and company bonuses as “found money,” and splurge on items they would not otherwise buy. If you receive a windfall or even a little extra, consider allocating the amount into three portions: one for long-term savings goals, one for short-term savings goals, and one to reward yourself.
  5. Use reward points. Several credit card companies offer specialized cash back programs which convert rewards points into cash deposits into 529 college savings plans, brokerage accounts, or other retirement accounts (e.g., IRAs).
  6. Get an accountability partner. To increase the likelihood of meeting your retirement savings goals, ask someone to hold your feet to the fire. Your accountability partner should be objective, and unlike a spouse, have no vested interest in daily household financial decisions. Your accountability partner should track your progress, offer encouragement, and continually remind you of your long-term goal. If you are already working with a financial advisor, ask him or her to take an active role in keeping you motivated and engaged in meeting your retirement goals.

As the late Jim Rohn once said, “We must all suffer from one of two pains: the pain of discipline or experience the pain of regret. The difference is discipline weighs ounces while regret weighs tons.” Failing to save enough for retirement comes in as the top financial regret of older Americans.[2] So, if saving for retirement poses a challenge to you today, give some thought to the challenges your future self will face if you don’t take these steps.

For more than 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

[1] Retirement Confidence Survey 2017, Employee Benefit Research Institute

[2] Bankrate Financial Security Index Survey, May 17, 2016

A dozen steps to a smooth transition to retirement

CookPaul-150-x-150Paul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

If there were one thing that sudden retirees wish they had, it would be time to think things through while still gainfully employed. They wish they had time to plan. The term “sudden retiree” refers to an ever-growing population of workers who found themselves retired due to unexpected events, such as the sale of a business, caregiving for a family member, downsizing, or sickness. Sudden retirees are typically forced to make decisions before they feel ready to do so.

If you are fortunate enough to exercise some control over when you will retire, you have an advantage over sudden retirees. You have the gift of time. You can prepare. You can think through all the angles and possibilities. You can ensure the smoothest possible transition by taking the twelve steps listed below.

  1. Visualize your exit. While retirement is a process, not a one-time event, it helps, to think about the event of exiting the workforce. How will your final days, weeks and months of work look? How will you spend your time? How can you pass the baton in a way you are most comfortable? Is it important to you to leave a legacy or footprint on your employer? If so, what actions will need to occur to ensure the legacy you desire?
  2. Visualize your entrance. Give thought to how you want to spend your days in retirement. What will your daily routine entail? Are there habits you want to form … or break? No longer confined to career-related personas, retirement provides an opportunity to reshape your identity and decide how you will present yourself to the world.
  3. Freeze frame. Take a snapshot of your current financial status by listing your assets, debts, interest rates on debts, and income.
  4. Retire high-interest debt. If possible, try to pay off any high-interest credit card debt, personal loans or auto loans before retirement. Typically, it is not wise to tap into your 401(k) or IRA to repay debt. If you are under the age of 59 ½, you could be subject to penalties and income tax liabilities, which could nullify any benefits you gain from the debt repayment.
  5. Revisit your retirement plan. Certain assumptions went into your retirement plan. When you know you are within 12 months of retirement, meet with your financial advisor to revisit those assumptions and strategies, and rebalance your portfolio with your newly established time horizon in mind.
  6. Make maximum contributions to your retirement accounts. If you have fallen short of maximum contributions, now is the time to step up your savings.
  7. Decide where and how you will live. Where you decide to live, including the location and the type of home, impacts nearly every dimension of your retirement experience. No longer anchored by the geographic constraints of your employment, retirement offers you the opportunity to re-think or re-commit to your residence. A study conducted by Bank of America Merrill Lynch shows 64 percent will move at least once during retirement, with 37 percent having already moved, and 27 percent anticipating doing so.[1] Factors to consider when making your decision include the cost of living in the area you’ve selected, weather, your home’s capacity to evolve into a more senior-friendly design, public transportation and services, accessibility to medical care, and proximity to family and friends.
  8. Lock down your retirement expenses. Some people believe they will see a significant decrease in post-retirement expenses; however, that may not be the case. In many instance, there is a trade-off in expenses. For example, you may not have the daily expenses of your commute to work, but taking long trips more often may nullify any savings. Most retirees’ expenses follow a U-shaped pattern. For the first couple of years, the expenses mimic pre-retirement expenses, then as the retiree settles in, expenses dip, only to rise as health care costs kick in.
  9. Formulate your income plan, by
    1. Deciding your election age for social security
    2. Considering other sources of income including fixed, immediate, and indexed annuity strategies, pensions, and even your house
    3. Creating a spend-down strategy so you know when and how to withdraw income from all potential sources
  10. Take preventative health measures. When it comes to determining retirement well-being, health is typically more important than wealth. Retirees in better health have the added peace of mind that comes from financial security. They tend to enjoy retirement more, feel fulfilled and are not as prone to negative emotions as their less healthy counterparts. [1] For most, health care costs top the retirement expenses charts. It makes good financial and medical sense to establish and adhere to healthy habits as a cost-containment measure and lifestyle booster.
  11. Strengthen your networks. Retirees who have strong social ties report higher levels of overall happiness in retirement. While still working, makes sure to build your social networks, so you have ways to connect with people who share your interests.
  12. Get serious about your emergency fund. It’s important to plan for how you will address emergencies, big and small, in retirement. According to a recent survey, 90 percent of Americans have endured at least one setback that harmed their retirement savings. Setbacks vary from caring for adult children, to college expenses stretching over six years instead of four. Others include loss of a job, assisted living expenses, and disappointing stock performance. On average, unexpected life events can cost retirees nearly $117,000.[2] An emergency fund can serve to prevent you from having to resort to retirement savings during hard financial times.

For more than 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

[1]  https://mlaem.fs.ml.com/content/dam/ML/Articles/pdf/ml_Home-Retirement.pdf

[2] http://money.cnn.com/2013/05/15/retirement/retirement-savings/index.html

Why every retirement plan needs a managed account

Marino_R 150 x 150Roddy Marino, CIMA, Executive Vice President
National Accounts & Distribution

Meeting the unique and specialized needs of retirement plan participants requires looking beyond a “one-size fits all” solution.

Managed accounts offer personalized, tailored asset allocation for individual participants and fiduciary oversight. Using investment goals as a guide, financial advisors can help determine the appropriate asset allocation based on risk tolerance and investment time horizon. This approach provides a more holistic view for participants instead of focusing on the age of retirement as target-date funds do. Additionally, unlike target date funds, managed accounts allow for asset allocation depending on the market environment.

Managed Accounts 2

Don’t let bad behavior get in the way

Investing can be an emotional rollercoaster and many investors find themselves reacting to the market highs and lows. For this reason, its beneficial to be invested in a managed account that has a team of investment professionals monitoring the market and making asset allocation adjustments as necessary.

Choose a comprehensive retirement partner

Because no two investors are alike, it’s important to work with a firm that offers retirement options that are personalized to individual participant goals rather than focusing on one component, the age of retirement.

Helping participants today

The retirement landscape is rapidly evolving and its important to evaluate the available options to find a partner that will offer the most appropriate solutions for participant’s needs. Offering a sophisticated managed account solution that addresses needs, risk tolerance, and investment time horizon can help participants reach their retirement goals.

For more than 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Retirement planning: Ten numbers you need to know

weber_bio

Brad Weber, Regional Director, Retirement Plan Services

When investors or financial planners talk about a retirement number, often it is the amount that you should try to save.

As this year’s National Retirement Planning Week comes to a close, it is an appropriate time to take a closer look at ten important numbers to consider when contemplating your retirement.

  1. Your current retirement account balance. This is the amount you’ve saved-to-date that is just for retirement and excludes illiquid assets.
  2. The number of years you expect to work before retiring. Do you think you will be working another six months or six years?
  3. The amount of money you plan to set aside each year you remain employed.
  4. The number of years you can expect to live. While no one can accurately predict this number, your average life expectancy is a critical variable in retirement planning. According to the Social Security Administration, a man reaching age 65 today can expect to live until age 84, while a woman of the same age can expect to live until 86. Tools such as the Living to 100, or the more simplified LifeSpan Calculator from Northwestern Mutual, will generate a prediction based on your responses to lifestyle type questions. The point of this exercise is less about trying to predict when you will die than it is to help you prepare for the reality of a retirement of unprecedented length.
  5. A projected rate of inflation throughout your retirement. As Roddy Marino explained in his recent blog post, even mild inflation over a 40-year span can erode your purchasing power and negatively impact your standard of living. Retirees must continue to invest in risk assets that they can reasonably expect will outpace inflation to retire comfortably.
  6. The amount of retirement income you expect to receive, from all sources, including social security, income on rental property, pension payments, and annuity income.
  7. Your anticipated monthly expenses in retirement. A good rule of thumb in thinking about future expenses is to take a hard look at your existing expense structure. While some may disappear or decrease significantly, you may find them being replaced by other expenses. For example, instead of daily commuter costs you may take longer trips so overall transportation expenses may not fluctuate that much.
  8. The percentage of stocks vs. bonds in your portfolio. You should know your portfolio allocation, and its associated level of investment risk. Throughout your retirement, your portfolio will have to provide both income and growth to maintain your purchasing power and support your lifestyle. It’s helpful, however, to know where you stand so you can assess whether your portfolio mix will help you achieve your retirement goals.
  9. The amount of financial support you will likely supply to your loved ones. Care for loved ones can play a significant role in shaping your retirement experience. As John Solomon, EVP of our Wealth Advisory group, points out in a recent blog, the number of adult children who provide personal care and/or financial assistance to a parent has more than tripled in the last 15 years. Currently, 25% of adults, mostly Baby Boomers, provide some care to a parent.
  10. Your anticipated medical expenses. Like predicting longevity, it is hard to know how much you will spend on medical expenses in retirement. According to recent estimates by Fidelity Investments, the average American couple spends nearly $260,000 in retirement on health-related expenses, excluding monthly insurance premium costs.

While all of these numbers play a critical role in shaping your retirement experience, probably the most important one you should know is the telephone number of a financial advisor.

An experienced financial advisor can help you manage your retirement portfolio to meet your preservation and growth objectives, establish an income strategy matched to your spending needs, and track your spending versus assumptions. Regardless of the situation, you know that your trusted financial advisor understands your financial history and can help make decisions that are in your best interests.

For over 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

For additional information on National Retirement Planning week from Brinker Capital, please review Frank Randall’s blog debunking common retirement myths.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Setting the record straight on common retirement myths

frank_randall

Frank Randall, Regional Director, Retirement Plan Services

It’s National Retirement Planning Week and an important time to take a closer look at some of the common myths that if followed, could decrease your spending power, and your happiness, in retirement.

  1. “It’s too late to start saving now.” Even in your late 40s or early 50s, you still have 15 to 20 years to grow your nest egg. The government has given incentives by enacting tax laws designed to help people over the age of 50 to contribute a little extra to retirement plans so they can catch up as retirement nears.
  2. “I can’t start saving for retirement until I pay off my debt.” Not all debt is bad. A financial advisor can help you differentiate between debt you can carry and the debt you should prioritize paying off over retirement savings (i.e., high-interest credit cards).
  3. “I’ll start saving after I get my kids through college.” Borrowing for college is easier than borrowing for retirement.
  4. “I need to be super conservative in my investments so my money will last.” The flaw in this strategy is that it doesn’t consider the impact of inflation. While inflation has been tame in recent memory, even at 2-3% over long periods of time, inflation can have a devastating impact on wealth.
  5. “It’ll just be me (and my spouse).” Many retirees either underestimate or do not anticipate the financial toll associated with providing financial support to their adult children, yet over one-third (36%) of the young adults ages 18-31 live with their parents. It’s not uncommon for the adult children to have children of their own, adding layers of both complexity and expense. Furthermore, Securian Financial Group reported that only 10% of the adult children living with their parents contribute to the household finances (e.g., pay rent). Retirees may also have the added expense of providing care to elderly relatives. In a recent blog, John Solomon, EVP of our Wealth Advisory group, pointed out that 25% of adults, mostly Baby Boomers, provide care to a parent.
  6. “I’ll pay it back.” Avoid borrowing against your retirement account. Even if you repay the loan, your nest egg will suffer because you will probably incur interest charges and fees. In addition, you will miss out on the compounding effect of the original funds, your contributions may be suspended while the loan is outstanding, and you will be more likely to sell low and buy high.
  7. “I won’t have to pay as much in taxes.” In retirement your income will be lowered, which will in turn lower your effective tax rate. Keep in mind; however, cost of living is impacted by all forms of taxes, including state income tax, local income tax, property tax, sales tax, capital gains tax, and Medicare tax. Also, in retirement you’ll likely have fewer federal deductions and dependents to claim, so a greater percentage of your income goes to the government.
  8. “Medicare will cover my health care expenses.” Medicare doesn’t cover everything, and the items not covered can add up. The Center for Retirement Research at Boston College estimates out of pocket medical care expenses for retirees at approximately $4,300/year for individuals and $8,600/year for couples. These amounts don’t include long-term care expenses. Many retirees purchase supplemental policies (called Medigap) to cover co-pays, deductibles and other expenses that Medicare does not. Medigap policies can ultimately cost you more than you paid for health care covered when employed.
  9. “I won’t have as many expenses.” Retirement expenses might not be as low as you think. Unstructured time often leads to greater spending. Also, many people wait until retirement to increase travel and pursue hobbies when work is no longer standing in the way.
  10. “I will have more time to study the markets in retirement.” The more you know about investment principles and the long-term historical record of the market, the better outcomes you can expect to achieve in your retirement portfolio. The American Association of Individual Investors found that investing knowledge enhances risk-adjusted returns by at least 1.3% annually. Over 30 years, the improved portfolio performance leads to 25% greater wealth. So, don’t wait until you are in retirement to begin studying up on investment principles. Start today.
  11. “I don’t need help.” While your financial mission in retirement may seem straightforward—to not outlive your money—the decisions you face along the way can be complicated. An experienced financial advisor can help you manage your retirement portfolio to meet your preservation and growth objectives, help you establish an income strategy matched to your spending needs, and track your spending versus assumptions. If a crisis arises, a trusted financial advisor will know your financial history and can help make decisions in your best interests.

For over 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

Click here to learn more about Brinker Capital Retirement Plan Services.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Avoiding retirement regrets

cook_headshotPaul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

Owning up to mistakes and admitting to missed opportunities may be cathartic, but it sure isn’t pleasant. Unfortunately, most older Americans have financial regrets. Per a recent survey, not saving for retirement early enough was the biggest regret of retirees. Not saving enough for emergency expenses (13%), taking on too much debt (student loan and credit card debt each at 9%), and buying a bigger house than was affordable (3%) were among the other regrets expressed in the survey.[1] While not uncommon, investment regrets pose unique challenges because the ability to recover can be limited by both time and opportunity.

Investor regret typically takes two forms:

Regret of action is the sinking feeling you get when you did something you shouldn’t have like investing in a stock tip you overheard while waiting in line at Starbucks.

Regret of inaction refers to something you wish you had done, like buying long-term care insurance for your mother a decade ago.

In a landmark study[2], Thomas Gilovich and Victoria Husted Medvec discovered that misguided actions generate more regret in the short term; but failure to act produces more remorse in the long run. You can, however, make bold financial moves today to avoid both short and long-term regrets in the future.

No matter where you fall on the financial spectrum, consider these regret-management moves:

  • Invest for the future today, again tomorrow, and again the next day. While two-thirds of U.S. employees are saving for retirement, according to the 2015 Retirement Confidence Survey conducted by the Employee Benefit Research Institute, their efforts fall short. You’ll never get this time back, so if you haven’t started saving for the future, then delay no more. The longer you invest money, the more time it has to grow.
  • Don’t confuse risk and volatility. Risk is the likelihood that you will not have the money you need when you need it to live the life you want. Paper losses are not “risk,” and neither are the fluctuations of a volatile market.
  • Measure progress against your goals, not industry benchmarks. As Chuck Widger and Dr. Daniel Crosby point out in The New York Times best-selling book, Personal Benchmark: Integrating Behavior Finance and Investment Management, by measuring performance relative to the specifics of our lives and the goals we have set, rather than vague generalities, we can become an expert in the “Economy of One.”
  • Infuse discipline into your investment strategy. There are several steps you can take to help make saving more of a habit, such as establishing automatic transfers from your bank account to your brokerage account.
  • Become a savvy investor. Even if you have a skilled advisor or your partner handles the family’s investments, you should have a baseline understanding of how investments work and the different characteristics and performance expectations for each asset class in your portfolio.
  • Get in touch with your emotional side. Most investors think that the strongest links to performance are timing and returns, but an investor’s behavior also plays a significant role. Over the last 20 years, the market has returned roughly 8.25% a year, but poor investment behavior has caused the average retail investor to gain only 4%.[3]
  • Control the controllable, not the markets. Do not try to predict or master the markets. Instead, focus on controlling the behaviors that negatively impact results, like impatient or impulsive investment decisions and overspending.
  • Work with an advisor. A trusted advisor will help you articulate your goals and design a portfolio to help you reach those goals while managing market volatility. But, your advisor’s value doesn’t end there … in fact, one of the most valuable things your advisor can do for you is to provide behavioral coaching along the way. Research has found that when an advisor applies behavioral coaching, performance increases from 2-3% per year.[4]

For over 10 years, Brinker Capital Retirement Plan Services has worked with advisors to offer plan sponsors the solutions to help participants reach their retirement goals.  When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees. This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

[1] Bankrate.com, December, 2016

[2] The Experience of Regret: What, When, and Why.

[3] Dalbar, Inc., Quantitative Analysis of Investor Behavior. Boston: Dalbar, 2015.

[4] 10 Surefire Ways to Ruin Your Financial Future, Dr. Daniel Crosby.

Providing care without sacrificing goals

John_SolomonJohn SolomonExecutive Vice President, Wealth Advisory

In what should be peak earning years, many employees of American business owners encounter family situations that make it difficult to save for retirement at planned levels. As parents and grandparents live longer and medical and long-term care expenses continue to rise, millions of Americans are providing care to ensure elderly loved ones can remain at home.

The number of adult children who provide personal care and/or financial assistance to a parent has more than tripled in the last 15 years. Currently, 25% of adults, mostly Baby Boomers, provide some care to a parent.[1]

On average, most caregivers are women (66%) who are 49 years old, married and employed.[2]  Being a caregiver means attending appointments, providing hands-on support, and “checking-in” often during work hours, making it difficult to juggle those duties with the demands of a career. No matter how flexible the schedule, caretaking obligations can negatively affect earning power and ultimately impact an employee’s ability to save for retirement. A national study of women who provide care reveals the struggle of balancing care and career:

  • 33% decreased work hours to provide care
  • 29% passed up a job promotion, training or assignment
  • 22% took a leave of absence
  • 20% switched from full-time to part-time employment
  • 16% quit their jobs
  • 13% retired early

shutterstock_515950540-2

In addition to impacting the ability to save, caregivers often have to tap their savings to pay for the care of their loved one. Co-payments, prescription costs, food, transportation services, home heath aides, and home modifications typically are among the expenses caregivers cover to the tune of around $5,000 a year.

The family caregiver trend will only gain steam as each generation’s life expectancy elongates. Here are helpful tips from for your employees that may be required to take care of their parents:

  • Establish an emergency savings account, pay off debt and maximize retirement savings opportunities before caregiving demands hinder your ability to do so.
  • Determine whether long-term care insurance is a viable option for your loved one.
  • Consider how you could approach siblings or other potential caregivers to discuss the emotional and financial realities of caregiving. Caregiving is a tremendous responsibility which has the potential of serving as a catalyst for family conflict in the absence of clear communication and understanding.
  • Make a commitment to continue to save for retirement through either a traditional or Roth IRA or a Simplified Employee Pension.
  • Put safeguards in place to help you resist the temptation to spend your 401(k) or IRA money to pay caregiving expenses.
  • Engage with legal counsel who can help in executing the necessary legal documents, such as a durable power of attorney, health care proxy, living will, or living trust.

For nearly 30 years, Brinker Capital has followed a disciplined multi-asset class approach to build portfolios that integrate an investor’s investment objectives and goals to ensure that their assets are effectively meeting their needs. Brinker Capital Wealth Advisory provides customized portfolios for business owners, individual investors, and institutions with assets of at least $2 million. An overview is available of the services provided by Brinker Capital Wealth Advisory. Find it here >>

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

[1] The MetLife Study of Caregiving Costs to Working Caregivers. (June 2011). MetLife Mature Market Institute.

[2] Family Caregiver Alliance National Center on Caregiving. www.caregiver.org.

Veterans Day: A time to say thank you

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer

Today we recognize those who have sacrificed careers, precious time with loved ones, and even their lives to answer our country’s call to service.

Please take a moment out of your busy day today to attend a Veterans Day event in your area or simply say thank you to those who are currently serving or have served in the military.

On this Veteran’s Day, we say thank you to our veterans at Brinker Capital—Chuck Widger, Tom Daley, Jimmy Dever, Lee Dolan, Jay O’Brien, Jim O’Hara, Jeff Raupp and Bill Talbot—and to everyone who has served and protected our country.

To be born free is an accident.
To live free is a privilege.
To die free is a responsibility.
–Brig. Gen. James Sehorn

If you’re looking for additional ways to get involved, click here for ideas.

Brinker Capital, Inc., a Registered Investment Advisor