Monitoring Service

Our Monitoring Service is designed to manage your finances so they can provide the cash flow you’ll need throughout retirement. Specifically, our Monitoring Service should be able to provide answers to the following questions:

• How do you discipline your cash flow so you can preserve your financial security?
• How do you react to uncertainty?
• How do you react to Murphy’s Law?
• What happens if you  earn less than your required rate of return?
• What happens if you spend more cash than comes in?
• Can your current nest egg support your planned future withdrawals?
  • Are your savings sufficient to support your future expenses?
• From where shall I take my income?
  • Source of withdrawals?
  • Order of withdrawals?
  • Conditions for withdrawals?
• What happens to my purchasing power if inflation strikes?
• What happens to my withdrawals if my portfolio falls in value in any one year?
• What happens to my withdrawals if my portfolio falls in value in any one year?
• What happens if my nest egg has grown?

Why do we offer this monitoring service?  Although we may have prepared excellent plans and projections for you, we cannot accurately predict what is to come.  Uncertainty cannot be avoided, and should not be ignored.  In fact, in retirement planning, uncertainty is the greatest financial risk.  For example, if a bear market occurs at the outset of a client’s retirement, it may greatly affect present and future income.  The most significant of the uncertainties are:

• Life expectancy
• Health
• Inflation
• Taxes
• Government programs, such as Social Security and Medicare
• Rates of return
• Volatility of returns
• Sequence of returns
• Counter party risk

To deal with uncertainty, we monitor your finances by applying a series of rules which we refer to as Professor Ulivi’s Eight Rules of Prudent Retirement Management.  These rules define specific actions which are triggered in response to particular events that affect cash flow.  The rules are briefly described below:

• Burn Rate Rule: If you do not want to deplete your capital, your burn rate should be zero.  The higher the burn rate, the faster you will deplete your capital.
• Funding Ratio Rule: Funding ratio should always be 100% or higher to make sure you can meet your income needs throughout retirement. 
• Portfolio Management Rule: Determines the source and order of each year’s withdrawal, when returns are positive and also when they are negative.
• Inflation Rule: Determines the size of the yearly withdrawal increase due to inflation.
• Withdrawal Rule: Determines the conditions when portfolio withdrawals are frozen from one year to the next.
• Capital Preservation Rule: This rule is triggered when some combination of adverse conditions causes the retiree’s current year’s withdrawal rate to rise more than 20% above the initial withdrawal rate.
• Prosperity Rule: Allows you to take out a bonus withdrawal under the right conditions.

In sum, our goal is to help you maintain your lifestyle and financial security throughout retirement.  That’s why we have developed our comprehensive approach that includes a Retirement Income Strategy, an Investment Strategy and our ongoing Monitoring Service.

To learn whether our strategies can perform as expected, please go to “Do Our Strategies Work?"