Navigating a clear course toward your financial security.

Step 6.  Investing your Retirement Assets

Risk tolerance:  Your comfort level with various types of investments must be determined. Investment returns are also governed by your willingness to accept greater market volatility.

Expected rate of return:  Your investment returns will have a major effect on the success of your retirement income plan. Investment returns are largely governed by your early portfolio asset allocation decisions.

Investment plan:  With goals identified and investment parameters defined, we will develop a written Investment Policy Statement (IPS) that will govern the investment approach. The investment policy statement is the road map for your retirement investments.

Asset allocation:  An asset allocation is the mix of stock, bonds and cash in your portfolio. It should provide diversity of investments, be appropriate for your goals and time frame, and be in line with your risk tolerance. Your asset allocation decision is very important as it governs your investment performance.

Three Bearings Fiduciary Advisors provides specific recommendations on which mutual funds, bonds or exchange-traded funds to buy that will meet your investment policy statement.  Once you have approved the asset allocation in the investment policy statement, we will place the trades for you in a timely manner so that you may participate in the markets as soon as possible.

Taxability of retirement income:  Within the various retirement sources, understanding the character of the asset is important.  Some income, such as wages and interest, may be taxed at ordinary tax rates, while dividend income and long term capital gains may be taxed at reduced rates.  Recovery of capital (the money that you originally invested) may be withdrawn tax-free.  A pro forma (future-looking) tax return for the first full year of retirement will be prepared to identify the tax consequences of various alternatives.

Continue with Step 7.  Managing your Retirement Income

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