Allocating for Retirement: One Client’s Experience

June 27, 2013

nesteggSome investors know FundX only as the publishers of NoLoad FundX newsletter, but our core business is money management. Since 1969, we’ve worked to help clients build wealth and fund their goals. We’ve helped some clients finance their children’s college educations, and we’ve helped others plan and fund their retirements.

The New York Times June 8, 2013 article about retirement investing reminded us of one of our long-term clients who hired us back in 1973 to help him save and fund his eventual retirement. At that time, he was working as a physician and managing a successful medical practice, so he had already accumulated some savings for retirement. For the first decades, we invested his portfolio in noload stock funds. Our goal was to grow his portfolio so that he’d have enough to live off when he eventually retired.

As our client got closer to retirement, we adjusted his allocation to include both stock funds and bond funds because while he still needed growth to make sure he didn’t run out of money later in life, he also needed capital preservation.

Twenty years ago, he retired with an allocation of 70% stocks and 30% bonds. We maintained this commitment to stock funds for growth because, as we wrote in this post, most retirees don’t need all their money at once. And in addition to current income, our client wanted a comfortable lifestyle that he could count on. Over time, we gradually shifted his allocation to a more conservative allocation of mostly bonds.

Today, our client is 95-years-old and still plays a round of golf each week. And he continues to live off the withdrawals from the retirement account we began managing 40 years ago. We are gratified to see that the plans we initiated four decades ago continue to be effective, and we hope that all of our subscribers, clients and shareholders will have a similar long-term experience. To learn more about our money management services or to talk with a portfolio manager about your retirement plans, please contact us.

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