PLANNING, SAVING, AND INVESTING FOR RETIREMENT
[Pages:23]PLANNING, SAVING, AND INVESTING FOR RETIREMENT
Six Considerations for Effective Goals-based Investing
PLANNING, SAVING, AND INVESTING FOR RETIREMENT
Six Considerations for Effective Goals-based Investing
1. Start with a Plan 2. Market Participation is Important 3. Risk Management is Key 4. Asset Allocation Drives Outcomes 5. Stay the Course to Pursue Your Goals 6. Cost Matters. Value Does Too.
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#1: START WITH A PLAN
? Determine your financial goals ? Establish a time horizon for achieving your goals ? Seek to manage risk ? Assess your investable assets, future contributions and future spending needs ? Work with your financial advisor to create and implement an effective
investment plan ? Consider a professionally managed goals-based solution that is designed to
help you reach your investment goals within a specified time frame, such as the Goal Engineer Series from Northern Trust
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Considerations for a sound investment plan:
Financial Goals
Time Horizon
Risk Management
Investable Assets
Future Contributions
Future Income Needs
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#2: MARKET PARTICIPATION IS IMPORTANT
? Growing assets is a main objective for retirement investors ? Risk and return go hand in hand ? Historically, the markets have created value for investors over time ? Stocks have been one of the best investments to build wealth ? Goal Engineer seeks to provide risk-managed growth throughout your
investment journey
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Hypothetical $10,000 investment -- 1946 to 2019
Source: Northern Trust Investment Strategy, Ibbotson. Data from 12/31/1945 to 12/31/2019. Past performance is no guarantee of future results. Returns reflect the reinvestment of dividends and other earnings. Returns of the indexes also do not typically reflect the deduction of investment management fees, trading costs or other expenses. It is not possible to invest directly in an index. Indexes are the property of their respective owners, all rights reserved. Indexes used: Stocks = IA SBBI (Ibbotson) U.S. Large Stock Total Return USD which is the S&P 500 total return, Bonds = IA SBBI U.S. Long Term Government Total Return, Cash = IA SBBI U.S. 30-day TBill total return.
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#3: RISK MANAGEMENT IS KEY
? Investors must contend with many types of risk ? It's important to understand the risks you assume, and to employ an
investment plan that is designed to manage them in line with your goals ? Market risk is the potential for loss due to fluctuations in market performance
(market volatility) ? Inflation risk is the probability that the purchasing power of your assets
will decline over time as costs rise and the value of a dollar shrinks ? Longevity risk is the possibility of outliving your assets' capacity to
support your income needs
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The Goal Engineer Series is designed to manage multiple types of risk:
Market Risk
Inflation Risk
Longevity Risk
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