Our single aim is to give you the best possible investment advice for achieving your goals.
When clients begin their investment advisory engagements, they nearly always have questions about what they will be able to do in the future.
- When should I retire?
- Can I maintain the same standard of living going into retirement?
- How can I be certain I won’t run out of money 15 or 20 years into my retirement?
- How do we receive the highest possible Social Security benefit?
- What will we do if in 10 years my or my spouse’s health deteriorates?
- How can I finance my children’s or grandchildren’s higher education?
- Can we travel every year for the first 10 or 20 years in retirement?
- Can we afford to buy that cottage on the lake?
- Can I retire early and then pursue what I really love doing?
And so on.
At Highland Wealth Advisory, we can answer all these questions with high confidence through financial planning. That’s why we recommend beginning each of our individual and family engagements by developing a financial plan.
The reason is simple: a financial plan is a critical step to answering questions you can and should have regarding your future. It is the key to understanding your long-term financial health. It helps bring clarity to your long-range planning, and it provides a powerful tool for aligning your investments with your financial and life goals.
Developing the plan requires some thought and homework on your part. What are your life goals? Which are mandatory, and which are stretch goals? What’s your tolerance for market risk?
We’ll analyze your current financial situation in the context of your plans, dreams and risk profile to determine the investment scenarios that best meet your goals.
Over time, your circumstances may change. Maintaining a current financial plan is essential to effective wealth management, so we review your plan regularly and update it once a year, ensuring you stay on track to meet your goals.
OPTIMIZING SOCIAL SECURITY
Determining your social security strategy is a cornerstone of sound financial planning, and for many, it’s the single most important consideration. Why is it so important?
- For most investors, social security is the only source of retirement income that keeps up with inflation. In reality, annual adjustments keep up with about two-thirds of inflation, but no other vehicles make such a guarantee.
- Your social security distribution varies greatly depending on the age at which you take it. For example, if you wait until age 70, rather than beginning at your full retirement age (between 65 and 67, depending on when you were born), your monthly payments will be as much as 32 percent higher. And that’s before taking inflation adjustments into account.
- Social security will provide the majority of the retirement income for many retirees, including most married couples in which both spouses worked.
Many factors go into optimizing your Social Security strategy. The law’s complexity is one. Benefits vary not only by the age you begin your distribution, but by other factors, such as your marital status. Spouses in married and divorced couples can be eligible for payments in a variety of circumstances.
Your strategy also must complement the other moving parts of your retirement plan—your retirement date, your other sources of retirement income, your interest in continuing to work in retirement, and so on.
We have years of experience in working with Social Security strategies as an integral part of our clients’ financial plans. You can feel confident that your financial plan will optimize your Social Security benefits.
Investment management is a three-step process:
Determine Your Asset Allocation Plan
We determine your asset allocation plan based upon three factors: your risk tolerance, your age, and indications from your financial plan regarding the appropriate risk level required to achieve your goals. Generally, the financial plan has the most influence, because it objectively demonstrates why a particular portfolio allocation is the right one.
The completed financial plan lays out the percentages of your investments to allocate to various markets that offer different return and risk profiles, from higher reward investments, such as domestic growth stocks, to safer vehicles, such as government bonds. The intent is to build a diverse portfolio that reflects the ideal return-to-risk ratio that supports your long-term goals.
Fill Your Asset Allocations
We use Morningstar and other research data to select high-quality investments to fulfill the selected allocation. Then we make your investments with Charles Schwab & Co., Inc., our custodian of choice, which provides a comprehensive set of global investment options. We earn no commission on investment transactions, so Charles Schwab has no influence on our investment decisions.
As a general rule, we invest no more than 10 percent of your assets in any one fund, typically resulting in a portfolio consisting of about 15 low-cost exchange traded funds or mutual funds.
Track Your Performance
With your investments in place, we track their performance, measuring them against industry averages. Should performance lag, we will move your investment to better performing funds within the same category, keeping it consistent with your asset allocation plan. We also adjust your investments in response to changes in circumstance, such as tax laws and inflation rates, or to rebalance funds that grow at different rates.
We meet with you regularly, typically quarterly or biannually to review your investment results and financial plan and make any necessary adjustments.
At our meetings, you’ll receive written reports on your investments, including:
- A written summary of key performance metrics and recommendations for adjusting the portfolio.
- A comprehensive memo outlining all of your financial plan’s planning assumptions and inputs, what-if scenarios, results and recommendations, delivered annually.
- An “Advisor Fee” memo explaining Highland Wealth Advisory billing.
EMPLOYEE RETIREMENT PROGRAMS
Many company owners are compelled to offer employee retirement programs because the best job candidates expect them. Complying with the complex laws of the Employee Retirement Income Security Act (ERISA) can be very challenging. An experienced advisor can help company owners perform in their legally mandated roles as fiduciaries to the retirement plan, fulfill ongoing legal requirements and help employees make good investment decisions.
And that’s the role we play. We can advise on all the roles and responsibilities involved in running 401(k) and 403(b) retirement plans—and we can execute many of their key elements as well. We can help you select the plan that is best suited to your business situation, as well as your plan record keeper, your third-party administrator and the specific investment funds you make available to your employees.
We also can perform ongoing management by helping you provide legally required communications to employees at the specified times, maintaining mandated records and documentation, and even meeting with individual employees to help them structure their portfolios. We offer our service at any of three levels: ERISA 3(16), 3(21), or ERISA 3(38).
Our approach lets you focus on what you do best—running your own business—while we ensure your employee retirement program delivers on its promise.