ira's larkspur
financial advisor marin
financial planning larkspur
income streams mill valley

Providing Income

There are numerous ways to generate income through retirement planning, but not every plan fits every client. We use a combination of strategies to best suit your needs.

Flooring is one strategy, which ensures that all essential expenses are met with reliable income, such as Social Security, pensions and annuities. It is imperative to match liabilities with assets, so that your minimal needs are not put at risk. If the market were to take another drastic downturn, this strategy would help ensure your resources remained available to meet your essential needs. Any additional assets are then invested in stocks and fixed income to meet your discretionary expenses. The ability to consume these discretionary goods and services will vary with the success of the invested assets.

We also use a bucket approach, which separates investments into separate pools for short-term, medium-term and long-term spending. Low-risk investments are placed in the short-term bucket to help keep assets designated for short-term needs available and secure. Somewhat higher risk investments are in the next segment, and the riskiest portfolio is set up for the long term. Income is drawn from one segment at a time until it is depleted of its assets.

For example, the short-term bucket is designed for the first five years of retirement and is made up of low-risk investments such as cash, and government and short term bonds. The medium term, which roughly covers years 6-15, a 40:60 stock-to-bond ratio is used, with the fixed income investments having a 10-to-15 year horizon. The long-term bucket is made up completely of stocks, which ideally provide growth over a longer period of time.

Using a systemic approach, we build portfolios of diversified investments based on the client’s risk profile, while managing the total return of the entire portfolio. To provide income, clients can either withdraw a pre-determined or policy-based amount, which is funded by a combination of interest, dividends, and/or portfolio holdings based on the client’s income needs and economic conditions.

In reality, there is rarely one approach that will meet all your needs. Each client is different and we will use elements of all or some of the approaches to meet the retirement income goals using a hybrid approach.

This communication is strictly intended for individuals residing in the states of California and Kansas. No offers may be made or accepted from any resident outside the specific state(s) referenced.


 Securities and advisory services offered through The Strategic Financial Alliance, Inc. (SFA), member FINRA, SIPC. Mark O'Brien is a registered representative and an investment advisor representative of SFA. CA Insurance License # OF32502

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