Managing Your Financial Future with Lucia Capital Group

No matter how much you save throughout your life, or how diligently you work to maintain your level of wealth, you can never really be sure that the money you’ve accumulated -- the money you need to live on throughout your retirement -- will last as long as you do.  That thought can be more than a little unsettling. The risks to your portfolio are many, and not all of them happen later in life.  B...

One of the old “rules of thumb” that’s been around since the early 1990s is the idea that your portfolio has a better chance of surviving 30 years if you withdraw no more than 4 percent of the total each year.   Some have said it should be even lower than that, perhaps no more than 2 percent. But whether the amount is 4 percent, 2 percent, or some other number, the more important  issue should be...

It’s a fact that retirees in general dislike spending down their savings.  In today’s low interest rate environment, and given declining dividend yields, how should one remove money from a portfolio for income without damaging the portfolio’s integrity and longevity? There are several possible routes to take, and unfortunately, many people may be tempted to reach for yield with either low-quality...

When it comes to retirement savings, you have a fair number of choices available to you.  One of the more popular options comes in the form of your employer’s 401(k) plan.  And these days, a growing number of employers are offering a Roth option to that plan.  The question for some people is whether the Roth option with their 401(k) is the right way to go. Much of that decision revolves around you...

If it seems to you like 2020 was an unusual year, you’re right - in more ways than one!  Of particular concern to many people was their financial situation.  Whether it was dealing with a job loss or change of employment, working from home, unemployment benefits, stimulus checks, or something else entirely, there’s little question that our finances were impacted in many ways. As we approach tax se...

If there's one thing most people can agree on when it comes to money, it's probably this: we don't like to pay taxes.  If there's a permissible way to avoid a higher tax bill, common sense would tell us that it's wise to consider it. A Roth IRA, for example, gives us the potential for tax-free distributions when done according to the tax laws.  And any growth that may occu...

Required minimum distributions (RMDs) are just a fact of life for most owners of an IRA or retirement plan account.  While RMDs are suspended for 2020, under normal circumstances, you typically must begin taking minimum withdrawals from those accounts (in most cases) at age 72. Given these circumstances, if you're charitably inclined, you may be able to take advantage of a little-known strate...

IRAs, whether Traditional or Roth, have unique characteristics.  Depending on the type of IRA you have, you may be able to manage your taxes or your income from your IRA by managing the taxes on the withdrawals. Roth IRA distributions are tax-free when the rules for taking withdrawals are all met.  So sometimes the tricky part is getting the money into the Roth IRA in the first place.  Do you make...

Taxes are a fact of life for most people.  Even your Social Security benefits - for which you had the pleasure of paying taxes to receive - are subject to taxation under certain circumstances. And this can hit you unexpectedly, putting a sizable dent in your benefit income. What to do about this?  First thing is to recognize when and how your Social Security benefits may become taxable to you.  Th...

If there's one "rule of thumb" that every investor should know, it's that there is a distinct correlation between risk and reward.  The greater the potential reward for an investment, the higher the risk.   Conversely, lower-risk investments tend to produce lower rates of return.  This is something that many investors often forget -- especially those who are new to the game.  I...

Life insurance appears to be a fairly easy topic to understand.  You pay your premiums to the insurance company, and if you die within the specified period of time, your beneficiaries receive the death benefit proceeds of the policy.  If you outlive the policy, no death benefit is paid. But that’s just one element of life insurance.  Another type is the often-misunderstood (and sometimes mis-sold)...

Back in 1998, Congress created one of its most popular tax-incentives in recent history – the Roth IRA. Since then, we’ve seen various changes to Roths, including who may contribute, how much they may contribute, and who is allowed to convert pre-tax IRA money into the Roth world. Because of its popularity, though, the Roth is sometimes improperly used by both investors and by those who give finan...

If you happen to be one of those people with a traditional pension plan, there’s one important piece of information you should know about: unless your spouse elects to sign a waiver that allows otherwise, your pension benefits will be paid out to the both of you in the form of what’s called a “qualified joint and survivor annuity.” In other words, you’ll receive a reduced amount during your lifeti...

If you’ve ever read an article about finance or listened to a financial podcast (other than this one), you probably heard someone say that you should “never” buy a certain financial product. Or, conversely, you've heard that “everyone should buy XYZ financial product, no matter who they are!” These are both plainly wrong, on so many levels. The real truth is that everyone’s needs and goals ar...

A few weeks back, we offered a strategy for people who want to pay off their mortgage in, say, 15 years, but don’t like the idea of making the higher principal payments that are required of a 15-year loan.  Following up on that topic, we received an email asking about whether paying off the mortgage is really nothing more than a cash-flow issue.  Is it?  Or are there other things to consider? On t...

Is it ever a good idea to mix stock market volatility with retirement?  Maybe.  It really depends on a number of different factors, not the least of which is your withdrawal strategy. But there are other forces at play here as well.  Do you need to access the money in your portfolio to help fund your near-term liabilities?  Or do you have enough income from other sources so that you may never need...

Retirement income calculators are everywhere online.  What’s more, they’re fairly simple in nature: plug in some current income and savings, expected rate of return, an inflation factor, and eventually it’ll spit back a number that you should aim to have in your portfolio that’s supposed to give you the income you need.  The trouble is - they’re often way off the mark. They may tell you that if yo...

So maybe you retired at age 65, and maybe you set yourself up so that you don't have to think too much about your financial strategy, and then -- boom!  You hit age 72, and you have to deal with required minimum distributions (RMDs) from your IRAs.  The rules for taking required withdrawals have always been somewhat convoluted, but as of 2020, they've changed quite a bit; and if you inhe...

You may have heard that a "traditional" balanced portfolio consists of some kind of mix of stocks and bonds: 60/40, 50/50, or something similar. The logic is that having a combination of stocks and bonds in a balanced portfolio acts as a potential buffer against loss with the goal of providing an opportunity for steady growth. But as interest rates have remained near their historic lows...

If you’ve ever looked at how much it costs to attend college, you're likely aware that it doesn’t come cheap.  The costs are high, and they seem to go a lot higher every year.  When you add up the tuition, fees, housing, along with other miscellaneous costs, even a “low-cost" local university can send you into years of financed debt.  So what are your options? It’s hard to do anything ab...

We'll say it right up front: taxes are NOT fun.  Nobody likes to think about them, much less actually do them every year.  For most, it's a matter of either turning them over to a professional and letting them deal with it, or trudging through it alone and hope you don't miss anything important. But while they're not fun to think about, they're also a necessary evil. This...

The COVID-19 outbreak has brought with it several changes for people who are facing deadlines, including filing federal and state income taxes. Another big one has to do with Required Minimum Distributions (RMDs) for 2020 – and maybe for 2019 as well. When the SECURE Act passed at the end of 2019, it changed the age at which IRA owners must begin taking RMDs, from 70 ½ to age 72. Several weeks lat...

When taking out a mortgage, people often wonder if it's better to have a 15-year loan instead of a 30-year loan.  They think of all the interest payments they'll save by shortening the loan period, and the fact that the home would be owned free and clear in half the time. Of course, they have to be able to afford the higher payments of a 15-year loan, which for some people is a deal-brea...

With everything that's been going on these days in the stock market, the economy -- the uncertainty of it all -- you might think that the confidence of those who are nearing retirement, or who are already retired, would be shaken more than a little bit.  But that's not entirely true. The Employee Benefit Research Institute (EBRI) conducted their 30th annual Retirement confidence Survey b...

The standard, cookie-cutter portfolio often consists of just three main assets: stocks, bonds and cash.  One may argue that this is not enough diversification, but that discussion aside, some investors seem to find themselves these days replacing some of their "riskier" stock portfolio with the relative safety of US Government bonds.  But interest rates are at historic lows, and the rewa...