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




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

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.



You Can’t See Tomorrow

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

Thomas Hobbes’ famous description of life in times of war as “nasty, brutish and short” could just as easily have been applied to peacetime in the 17th century. Life expectancy in relatively developed England was just 35 years during Hobbes’ lifetime, owing largely to high infant and child mortality rates. In the less developed American colonies, life expectancy was a scant 25 years in Virginia and 40% of New Englanders died before reaching adulthood.

While very few of us would trade the realities of Thomas Hobbes’ day for our own (indoor plumbing is awfully nice), there is no denying that we are psychologically better equipped to prepare for a short life than a long one. The reason this is so is that we have a tendency to focus on the here and now and discount the future that psychologists refer to as “present bias.” To illustrate the power of present bias, consider the following:

Suppose I asked you whether you would like $250 one year (52 weeks) from now or $225 50 weeks from now – which would you choose? Now, what if I offered you a choice between $225 right this second or $250 two weeks from now – would your answer change? If you are like most people, you chose to wait for the larger payout in the first scenario but selected the immediate payoff in the second scenario. The farther we move from the present moment, the more dramatically we begin to discount time. Both scenarios involve a $25 gain for a two-week wait, but we perceive them very differently.

Present bias is rooted, among other things, in our tendency to experience now as a “hot” emotional state and the future in cooler terms. Simply put, right now seems more real than twenty years from now. As a result, many people prioritize meeting the needs of the all-too-real right now but ignore the just as real, but less salient, needs of their future self. If this is done consistently enough, tomorrow becomes today and you find yourself wholly unprepared.

Solution: Stanford Researchers1 have found that seeing a computer simulated aged version of your face makes you more likely to save for retirement. Why? Seeing the “older” version of yourself moves you from a cool to hot emotional state and makes the reality of your retirement more visceral. Psychologists have shown repeatedly that the more salient a variable is, the more likely it is to be acted upon. Start to increase the salience of your own retirement by discussing a few of the following questions with a partner or loved one:

  • Where will I/we live in retirement?
  • How will I spend my days in retirement?
  • What will be the best part of being retired?
  • What problems might arise that I could prepare for now?

For 10 years, Brinker Capital Retirement Plan Services has been working with advisors to offer plan sponsors the solutions to help participants reach their retirement goals.  The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.


1 Exploring the “Planning Fallacy”: Why People Underestimate Their Task Completion Times, Roger Buehler, Dale Griffin, and Michael Ross.  Journal of Personality and Social Psychology, 1994.

Nix the Mixed Emotions About Retirement

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

The future holds many uncertainties, leaving us to often have mixed feelings when thinking about retirement. Even if you feel more than ready, on an emotional level, to move to the next phase of your life, you may have some uncertainty about whether you will be able to maintain the lifestyle you wish.

Last week in Roddy Marino’s Eight Signs You Are Ready to Retire, he shared some useful statistics from an Ameriprise Financial survey that address this notion of mixed emotion. Close to 50% of respondents felt they were ready to retire, but admitted that there was still some concern. 21% admitted more bluntly that they felt uncertain or not ready at all. Suffice it to say that a large portion, about 63%, of newly retired boomers said they felt stressed about retirement leading up to the decision.[1]

We’ve talked before about how your physical health can impact your retirement, but let’s take another approach and look at six financial certainties that may help to lower your stress and avoid some of the mixed emotions about retirement.

  1. You will need cash. Throughout your retirement journey, you will need quick access to your money. Typically, you will need enough liquidity to cover two years’ worth of anticipated living expenses.
  1. The quicker you spend, the shorter it will last. Your predictable expenses may total up to, for example, $2,000 a month. But how many years could you go on spending $24,000? The impact of spending on your portfolio becomes clear once you determine a spend-rate. For example, if you had $500,000 in a retirement savings account and withdrew $2,000 a month, the portfolio would last 20-29 years. A $500 reduction in spending, however, could result in 9-15 more years of longevity for the portfolio.
  1. The money not needed to cover expenses must be invested…wisely. While you can’t control the markets, you should feel confident that your investments are managed with skill and integrity. Choose an investment advisor with whom you have a trust and have a high level of confidence.
  1. Eventually, you will run out of cash and need more. One of the tricky parts of managing your money in retirement involves knowing how to create an income stream from your portfolio. You need to figure out which assets to take distributions from, and when. To ensure that each of your assets performs optimally, you must conduct a careful technical analysis and evaluate moving market trends. If you are like most retirees, you could benefit from having an expert perform this service for you so that you can have confidence that you are benefiting from all possible market and tax advantages.
  1. You’ll make more confident decisions if you know how your investment performance and expenses measure against your goals. Throughout your retirement journey, it is helpful to know where you stand against your goals. If your overall goal is to outlive your savings, then you should have a system in place that helps you contextualize your spending and its relative impact on long-term goals.
  1. Markets are volatile. When markets fluctuate, many investors feel like all semblance of control over their financial future is lost. Having a well-diversified portfolio may help to smooth the ride and reduce some of the emotions of investing.

If you approach retirement by developing an income solution that addresses each of these known facts, you can feel as if you are on more solid ground to enjoy your retirement.

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

[1] Ameriprise Study: First Wave of Baby Boomers Say Health and Emotional Preparation are Keys to a Successful Retirement, February 3, 2015