Clearview’s Sustainable Wealth Track Can Help Provide An Answer

A Sustainable Wealth Track is a thoughtfully designed path into and through the years of retirement.  It lays out the appropriate withdrawal rate and asset allocation policy and does so within a manageable risk tolerance framework.   Having studied the academic literature on this topic over several years, we have arrived at what we believe to be a safer, more client centered policy framework.  Retirement spending guidelines should be practical, sustainable and sensitive to a client’s willingness to bear riskFlexibility and thoughtful planning, especially tax planning, are very important in determining the appropriate solution.   While many advisors simply default to a level of 4 to 5% annual withdrawal rate in discussion with their clients, we believe that a successful solution involves a series of planning steps.

The process of determining the appropriate withdrawal rate is complicated. There is a great deal of research on spending guidelines based upon capital market expectations combined with the market’s historical returns.  More recently, Monte Carlo modeling (simulations based upon historical returns) has become popular as a way of arriving at an optimal withdrawal rate and asset allocation.  However, historical returns may not be a good forecasting method.  Further, it is impractical in our view to use a “black box” manipulation of historical returns as a way of arriving at a specific client’s future rate of withdrawal.   

The Five Steps to Achieve a Safer, More Sustainable Retirement:

Educating Both Client and Family on the essential decisions and variables is a first step.  There is no one-size-fits-all safe withdrawal rate or asset allocation that can work for everyone.  Risk tolerances and the client’s past experiences with investing are important considerations.   We gain insight into the family’s objectives for the portfolio corpus and the potential needs of future generations through this discussion while creating understanding and managing expectations.  

Acquiring Sufficient Wealth to support retirement is of paramount importance.    We develop a plan defining the optimal amount of wealth that should be set aside during working years in support of a positive post retirement experience.   Clients must realize that spending is done in after-tax dollars so we must plan for and then manage assets in a tax-aware way to maximize funds available.

Developing and Maintaining a Logical and Dependable Spending Plan Designing a plan and staying with it can have a huge impact on long term success.  Periodic reviews can help to keep track of market returns/spending results, and any one-time family expenditure needs.  Unanticipated contingencies such as inflation, economic cycles, market dips or family emergencies must be factored in.

Recognizing that Portfolio Results are Market Path Dependent is an important consideration.  After a prolonged stock bear market, when stock prices/earnings ratios are low, slightly higher withdrawal rates may be employed effectively just as after a prolonged bull market, when price/earnings ratios are high, it may be necessary to use a lower withdrawal rate.  Likewise, when bond income generation rates are low, as they are now, we must factor into the solution a greater reliance on stock returns.  The allocation to stocks, however, must remain commensurate with a client’s risk tolerance regardless of rates.

Retaining Flexibility in Retirement Spending Near term spending increases (above inflation) may occur or reductions may become necessary as a result of market conditions.  Through ongoing reviews we can help our families to react to earnings shortfalls (a decline in corpus) early and thus limit any damage.  Inflation, the change in moneys purchasing power, is also carefully monitored as it may also become an important planning issue. A long term focus is appropriate and it allows for a more consistent stock allocation over time. 

At Clearview, we believe that a successful solution (an appropriate withdrawal rate and asset allocation) involves dedicated planning and a unique client-based design.  To sustain a retiree’s, or post-divorce family’s, wealth over an extended time frame requires both investment and spending discipline.   We believe that following these five steps can significantly improve the chances of success.   By establishing practical retirement spending guidelines, remaining flexible to market dynamics and sensitive to our client’s willingness to bear risk, we can support a better solution for the long term.  Thoughtful planning, especially tax planning, can also add significant value.

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Real Retirement Solutions

designed to improve
  • Wealth Preservation
  • Management of Risky Assets
  • Peace of Mind

This is achieved through an ongoing assessment of market risks given your specific financial situation and goals.

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Professional Expertise

Leadership Team

Richard Furmanski

Richard Furmanski

CFA

has been a portfolio manager and analyst for over 35 years. He manages conservative, tax-efficient portfolios for both pre-retirees and retirees. His lower risk approach appeals to investors who want less volatility and competitive risk-adjusted returns.

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Mary Ellen Adam

Mary Ellen Adam

Director of Operations

has been in office administration for over twenty years. Her experience includes customer service, firm operations, and office administration. She interacts with our clients on a day-to-day basis and handles any requests that may arise.

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Frequently Asked Questions

If you can't find the answer to your questions here, feel free to give us a call at 847-847-2505

Do you manage both stock and bond portfolios?

Yes. We build a portfolio of conservative, high-quality stocks and hold them for the long-term. The average holding period is 4 – 5 years. Our focus is on stocks that are suitable for retirement portfolios.

Our high-quality bond portfolios are designed to provide both income and stability of principal. Bonds provide the anchor for balanced accounts (those holding both stocks and bonds).

What is your investment philosophy?
We take great care in purchasing only high-quality stocks and bonds intent on a multi-year holding period. Portfolio turnover and taxable realized gains are modest in comparison to other active managers. We do not time the market but will become more defensive, in terms of stock holdings, when market conditions warrant.
Will the portfolio be managed in accordance with my financial goals?
Yes. Each of our clients has a custom-tailored portfolio. These custom portfolios are designed to meet specific client objectives with a thoughtful approach to specific constraints such as risk tolerance. And as each client’s situation changes, the portfolio does as well. There is no cookie cutter approach.
What kind of expertise do you have and how can that help me in difficult markets?
We have been working with high-net-worth clients like you since 1982. Over that time we have helped them to navigate several bear markets and financial crises (including the stock market crash of 1987). We hold the Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP) designations.
Are you sensitive to taxes when managing portfolios?
Yes. Our holding period for an individual stock averages 4 plus years which means our turnover is low and realized gains can be carefully managed. Further, where possible, we tax loss harvest small losses as a way of offsetting gains taken elsewhere in the portfolio.
How have you performed?
Results will differ by client and the level of customization but we have provided competitive investment returns for many years.
How do you charge for your services?
We charge a management or consultant fee based upon the size and level of customization of the account. As the account grows, we benefit together.

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