Managing Your Financial Future with Lucia Capital Group

When the stock market behaves erratically, it can create a lot of fear and anxiety among investors. Large swings to both the up and down side are what is known as volatility, and, like turbulence in an airplane, it can make people jittery and prone to making rash moves. Stocks are always volatile in the short run.  But stock market investing should never be a short-term play.  So why does volatili...

It's a fact that many people are not aware of: your wealth accumulation strategy should be vastly different from your wealth distribution strategy.  In fact, they require very nearly opposite skills. Building your nest egg requires you to use the market volatility to your advantage, using various means like dollar cost averaging and buying through the many market downturns.  But keeping your...

The Bucket Strategy® is both simple and complex.  It’s simple in the sense that there’s a short-term, midterm, and long-term bucket, and maybe a couple of others, depending on your needs.  The complexity begins when you need to determine which assets should go into which buckets. There are many things to consider: time frame, taxability, income needs, and available assets, to name a few. How do yo...

If stocks are inherently risky, and if you're retired and you're risk-averse, doesn't it make sense to lessen your exposure to the stock market as you get older?  That's the logic behind certain "rules of thumb" that say the older you are, the less money you should have in stocks. But that logic is faulty.  It assumes that everyone's situation is the same, and, e...

Social Security retirement benefits are the bedrock of guaranteed income for most American retirees.  It forms the income basis that helps to build the rest of your portfolio's withdrawal strategy.  So it makes sense to ask the question: at what age should I begin taking my retirement benefits? Everyone eligible for benefits has a "full retirement age" at which benefits may be paid...

Very few things in life are universal, especially when it comes to finances.  What’s right for one person may be completely wrong for another.  Yet there are certain lessons with money that everyone could benefit from knowing, no matter what a person’s individual circumstances may be.  After careful review, we’ve narrowed them down to six.  What are the six financial lessons that everyone should k...

You may have noticed that real estate prices have been ticking up at a steady rate for the past several years.  For many people, that means they have no choice but to take out a mortgage. At the same time, there are those who have either enough current gains or enough cash on hand to consider buying a home with cash. Having the cash to pay for a home, versus investing that amount and taking out a...

Once you hit retirement, you'll probably have money in several types of accounts: a 401(k) from work, some personal money in a brokerage account, your regular checking account at the bank, and maybe some Roth IRAs, to name a few. Once it's time to start withdrawing that money, the important question you should ask yourself is this: from which account(s) should my funds be taken out, and...

There are many ways to save for retirement.  Two of the most popular are the 401(k) and the IRA. Both are savings vehicles, but both have different attributes that may make one of them better for you.  There are advantages and disadvantages to both.  Do you need a tax break now? Are you able to deduct contributions to an IRA? Does your company have a match on any of your 401(k) contributions? Thes...

You may have heard that stocks are too volatile for retired people to own. In fact, there’s an old rule-of-thumb formula that says you should decrease your stock holdings by 1 percent every year and replace them with bonds.  These generic “guidelines,” though, are hardly prudent advice for most people, because everyone’s situation requires a different approach.  It may actually be more beneficial...

We're half way through 2024, and it's time to get your financial house in order!  What moves, if any, should you have made at this point?  What about going forward? There's still time to do some tax management, maybe take a look at your 401(k) plan, and decide how you may want to allocate your investments before the year is out. So what's left to do? There's still plenty o...

What’s your most valuable asset when it comes to investing? Is it maybe knowing the right stock to buy and when? How about a spreadsheet of things like P/E ratios, or being diversified across dozens of different classes?  No – as it turns out, your most valuable asset with investing is time.  The stock market, despite what you may have heard, is a long-term game. The daily, weekly, and monthly noi...

When you buy a bond, you might expect that the amount of interest stated on the coupon is the amount of interest that you’ll be receiving.  So if you have, say, a $10,000 bond paying 5 percent interest, you probably figure it will pay you $500 each year.  But that isn’t always the case.  This is where it’s important to understand not just the bond’s current yield, but probably more importantly, th...

It’s been said that the most important rule of finance is to not consistently mess things up.  In other words, you need to survive the short-term chaos – and there’s lots of it – to reap the potential long-term rewards. If you can buy enough time to weather the constant storms, you may find yourself in a very good position down the road. The Bucket Strategy® is something we’ve talked about for dec...

Many times in life, we see how one career field translates extremely well into another.  Engineering is a great example of this. A good engineer needs to know what a project’s goal is, put the pieces together in a way that works, and then stress test it to make sure it works in all conditions. Financial planning is a lot like this. What does each individual want to achieve financially? What do we...

If you're at all familiar with the Roth IRA, you probably know that there are income limits for people who want to make a contribution to a Roth. These limits generally go up a little bit each year, but anyone who makes over a certain amount of money is ineligible to make a Roth contribution. But that doesn't mean those with a high income have no access to a Roth, or to certain Roth stra...

Are you in line to inherit an IRA? While inheriting almost any asset is generally a good thing, it's helpful to know the rules - mainly tax rules - that come along with it, especially if you plan on keeping as much of that money as you can. Some new laws went into effect on inherited IRAs within the past few months, and when you combine those with the regulations that were already in place, i...

Many people who are at Required Minimum Distribution age find themselves wanting to give some of that distribution to charity. They don't need the money to live on, and they'd like to help out their favorite organizations or causes in any way they can. A standard way to do that is to take possession of the RMD, then turn around and write a check to the charity. Taxable money coming in, t...

How much money does it take for you to retire in comfort?  Is it $1 million? $2 million? Far more than that?  Far less?  Large investment firms and many media outlets often throw out big "retirement" numbers based on small surveys they took of people who may or may not have any clue about how much money they actually need. But it's a fair question.  And it's one that everyone s...

There are two distinct phases of your financial life.  The first one is the years (decades) that you spend accumulating assets: building your savings, investing in retirement plans, etc. The second phase is when you begin taking those accumulated assets as distributions and live off of that income in retirement. The first phase is usually the one that gets all the attention.  Books have been writt...

Social Security is vital part of many people's retirement income. It forms the foundation of a retirement plan and helps to determine how much (if any) money an individual's portfolio will have to provide throughout their retirement. But it's also extremely complex.  There's much more to it than simply turning on an income stream once you're eligible: spousal benefits, sur...

If you have a pension, the decision of how and when to take the payments is an important one.  Are you offered the choice to take the entire amount as a lump sum?  If so, is that option potentially better than a stream of monthly payments? What about your other choices? For married people who want to get as much as they can now, are they sacrificing the financial stability of their surviving spous...

What are people's most prominent financial fears?   There are many: losing a job, not saving enough for retirement, financial emergencies, and many others.  But it all seems to boil down to one basic concern: Not having money available when you need it the most. This creates a lot of anxiety for people - especially for retirees, who rely on a steady stream of cash flow to meet their short-ter...

You may have heard that a basic Bucket Strategy® consists of a 3-, 4- or 5-Bucket plan, with each bucket separated into groups of short-term, mid-term, and long-term assets.  What you may not have heard is that a good Bucket Strategy will often “blend” buckets to potentially give a retiree a much better overall outcome. What do we mean by “blending” the buckets? In essence, it means to blend the i...

When you get to retirement, your portfolio - that is, your savings - will presumably provide you with the money you need.  The more guaranteed income you have from other sources (like Social Security and pensions), the less your portfolio will have to kick out to you. This is a crucial part of the financial planning process.  The time when you begin taking those benefits, and how much they will pr...