Articles and Videos

The 4 Steps of Retirement Income
Lucia Capital Group Weekly

The 4 Steps of Retirement Income

February 27, 2020

Financial planning is our business; it’s what we do every single day. And since no two people have the exact same goals, risk tolerances, investments, and income needs, every single plan we put together is different. Much of the planning process boils down to this: How do we create enough retirement income for you to live the way you want to live, without having to worry about how long your money will last? Some people have all the income they’ll ever need, and more. Others require some extra careful planning to meet their goals. But while the details of each plan may be vastly different, there are some common basic steps that we use to formulate each one.

3 Questions Every Confident Investor Should Ask
Lucia Capital Group Weekly

3 Questions Every Confident Investor Should Ask

February 21, 2020

The current bull market for stocks began on March 9, 2009. But the belief among some investors at that time was that stocks still had farther to fall, and the worst was still to come. They were wrong. Now, nearly 11 years later, we still have not seen another bear market in the S&P 500. This situation has created in the minds of some investors that stocks will continue to climb forever – a mistaken idea that could have dangerous consequences. When markets are flying high (or, conversely, when they’re sinking into oblivion), it can create a recency-bias mentality that may cause you to stray from your stated investing objectives. You may be tempted to make a risky move in response that you’ll later wish you hadn’t: a move that may be irreversible. Before you make a move like that, either out of fear or elation, you should ask yourself three important questions.

Can You Control the Uncontrollable and Forget the Rest?
Lucia Capital Group Weekly

Can You Control the Uncontrollable and Forget the Rest?

February 13, 2020

In last week’s video, we explained why it’s often better to manage the amount of risk you take in your portfolio, rather than trying to achieve a high rate of return.  We showed how two sets of hypothetical portfolios, both with the exact same investments over a 10-year period of time, could have entirely different outcomes — simply by changing the date that a retiree began taking withdrawals. In this week’s edition of Lucia Capital Group Weekly, our “Professor” Rick Plum takes that same hypothetical scenario and expands the time horizon by another ten years.  How did these two (imaginary) identical portfolios fare after a 20-year time horizon? You may be surprised.  
Manage Risk, Not Return
Lucia Capital Group Weekly

Manage Risk, Not Return

February 6, 2020

When it comes to investing, people often make the mistake of focusing on the wrong goal. Certainly, most everyone would like to see a good rate of return on their investments, and it’s nice when that happens, but trying to manage your way into achieving a high rate of return is almost always a fool’s game. Day trading, chasing yield, acting on short-term market predictions, and other gambits are not only time-consuming, but also time wasting. There is simply too much that is out of your control. A better way to go may be to focus instead on what is actually manageable: the amount of risk you take. While lower risk usually offers lower rewards, it may also potentially protect your portfolio from loss. This may be especially true over longer periods of time — and when it comes to stock (equity) investments, a long time horizon is essential.

Two Roth Rules You Need to Know
Lucia Capital Group Weekly

Two Roth Rules You Need to Know

January 30, 2020

Roth IRAs have been around for more than two decades, and their tax-free withdrawal potential is an important retirement planning asset for many people. But violating the rules of the Roth can easily create a taxable event for you — thus defeating the purpose of having a Roth in the first place. That’s why it’s a good idea to understand how they work. Two important rules that people tend to overlook have to do with what we call the “five-year clock.” Earnings within a Roth IRA sometimes have to wait out this clock before they’re eligible for tax-free (or penalty-free) status. It often depends on how the money got into your Roth in the first place.

A Strategy That May Save You Thousands in Taxes This Year
Lucia Capital Group Weekly

A Strategy That May Save You Thousands in Taxes This Year

January 23, 2020

Of all of the bills you pay in your life, your tax bill has to be one of the hardest. Unlike with your credit card bill, or your electric or water bill, you get virtually nothing in exchange for shelling out your tax money. So it stands to reason that you’d like to pay only the absolute minimum amount in taxes over the course of your lifetime, if at all possible. At Lucia Capital Group, we love a good strategy – especially a tax strategy. If you’re in a somewhat high tax bracket, and you want to make a gift to someone in a lower bracket – like maybe your kids – you may be able to do it in a way that benefits both the recipient and yourself.