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Check out this video to learn more about the highly successful model David has infused into his planning process

In the realm of investment strategies, one of the more intriguing approaches is the endowment model, notably employed by large institutions like university endowments. This model, championed by figures like David Swensen of Yale University, offers unique insights for individual investors, especially those planning for retirement.

Understanding the Endowment Model

At its core, an endowment is a financial asset, like a fund, held by institutions such as universities. It’s made up of donations that are invested to generate income for the institution. The principal amount generally remains intact while the income supports various expenses.

The Yale endowment, under Swensen's management, became a hallmark of this approach. Yale’s strategy was not just successful but also revolutionary in how it diversified investments beyond the traditional stock and bond portfolio. This diversification aimed to achieve steady returns while minimizing risks.

Applying Endowment Principles to Retirement Planning

Retirement planning can be akin to managing an endowment. In both cases, the goal is to create a sustainable income stream from a large pool of savings. The typical recommendation for endowment funds is to aim for a 5% annual distribution. This figure interestingly aligns with the retirement income strategies suggested by many financial planners.

However, a critical difference lies in the investment approach. Traditional retirement portfolios often focus heavily on stocks and bonds. In contrast, the endowment model advocates for a more diversified portfolio including alternative investments.

Beyond Stocks and Bonds: Exploring Alternative Investments

The endowment model’s success largely stems from its inclusion of alternative investments. These can range from private equity and hard assets like real estate to even more niche options like annuities. For instance, Yale’s portfolio in 2001 included a significant portion in hard assets, primarily real estate, alongside a smaller proportion in domestic and foreign equities.

This diversification strategy not only reduces reliance on the stock market but also potentially smoothens out returns, reducing volatility. The objective is to create a portfolio that can withstand market downturns better and provide more consistent returns over time.

Real Estate as a Stable Investment Class

Real estate, especially in sectors like student housing, is a prime example of an alternative investment that can offer stable returns. Properties near major universities, such as USC, Notre Dame, or Northwestern University, can provide a steady income stream, often with tax advantages.

Annuities: Another Diversification Tool

Annuities are another diversifier in this model. While not directly linked to stock or bond markets, they can provide a steady income, adding another layer of stability to a retirement portfolio.

The Importance of Non-Correlated Asset Classes

One of the key strengths of the endowment model is its use of non-correlated asset classes. Investments like real estate or annuities don’t necessarily move in tandem with the stock or bond markets. This non-correlation can significantly reduce the portfolio's overall risk.

The Real-World Application and Accessibility

For individual investors, adopting an endowment-like strategy means moving beyond the conventional wisdom of a stock-and-bond-dominated portfolio. It involves exploring and investing in a variety of asset classes. However, this approach requires careful planning and a thorough understanding of each investment type.

Seeking Professional Advice

Given the complexity of this investment strategy, seeking professional advice is prudent. Financial advisors with experience in the endowment model can provide valuable insights and help tailor a portfolio that suits an individual’s retirement goals and risk tolerance.

Conclusion: A Balanced Approach for Long-Term Stability

The endowment model, inspired by the strategies of large institutions like Yale University, presents an innovative approach for individual investors, especially those in retirement planning. 

Its focus on diversification across various asset classes aims to provide a balanced investment portfolio that can weather market volatility and generate sustainable income. While it may require stepping out of the traditional investment comfort zone, the potential for a more stable and robust retirement income is an enticing prospect for those willing to explore beyond stocks and bonds.

Check out this video to get some insight into David's personal story which lends to the purpose in his passion to help his clients achieve retirement success.

The world of retirement planning is deeply influenced by the personal experiences and histories of those who navigate it. One such journey, devoid of specific names but rich in lessons and insights, offers a valuable perspective on how early life experiences and family histories can shape professional philosophies in financial planning.

Early Life Influences and Family Dynamics

The story begins with a young individual, whose life was significantly impacted by their parents' divorce at the age of two. Raised by a single mother with two other children, this person found solace and guidance in the care of their grandparents. These formative years spent with grandparents in a small town provided foundational life lessons and values.

One grandparent, a dedicated employee at a major company like Sears Roebuck, which narrowly escaped bankruptcy, served as an emblem of resilience and adaptability. This grandparent's profession as a television repairman represented a now-obsolete trade, reflecting a bygone era of technological simplicity and hands-on skill.

Financial Lessons from a Grandparent

The grandparent's investment in company stock, such as Sears, showcased the importance of financial involvement and awareness. This early exposure to stock investments and the significance of pension plans left a profound impact on the young individual, instilling a keen interest in financial planning and investment.

Despite modest means, the grandparent exemplified fiscal prudence and the virtue of saving, owning a home outright, and living within one's means. These characteristics were not just survival strategies but were also foundational principles that would later inform a career in financial planning.

The Challenges of Aging and Healthcare Costs

A turning point in this narrative was the grandparent's diagnosis with dementia, leading to significant healthcare expenses that eventually depleted their savings. This transition to relying on Medicaid, a program necessitating minimal personal assets, highlighted the financial vulnerabilities faced in old age.

The family's subsequent struggle with a lien on their property due to Medicaid benefits underscored the complexities and challenges of elder care and its financial implications. This experience, occurring at the onset of the individual’s career in financial planning, was a catalyst for a deeper understanding of elder law and financial protection strategies.

Shaping a Career in Financial Planning

These personal experiences with family financial challenges directly influenced the individual's approach to retirement planning. Observing first-hand the impact of medical expenses and the necessity of financial preparedness in later life, the individual adopted a philosophy emphasizing the protection of capital, its growth, and the generation of sustainable income from it.

This approach was further informed by the mindset of the "depression babies" generation, known for their skepticism towards banks and cautious approach to market investments. This background instilled a sensitivity towards clients who value security and stability in their financial planning.


This narrative, while not tied to a specific individual, illustrates how personal experiences can profoundly shape professional approaches in fields like financial planning. It's a poignant reminder that behind the technical aspects of financial advising are human stories, experiences, and histories that influence and guide the strategies and advice offered by professionals in this field.


Retirement planning is an essential aspect of financial management, yet it remains a challenging endeavor for many. Understanding the nuances of investment, market trends, and effective strategies is vital for a secure retirement. 

This blog post explores key principles and strategies to help individuals build a robust retirement plan, emphasizing risk management and financial efficiency.

The Reality of Retirement Preparedness

Statistics indicate a concerning trend: a large percentage of individuals reach the age of 65 without adequate financial resources, often relying on family or government support. This underscores the importance of proactive and strategic retirement planning, focusing on creating a guaranteed lifetime income.

Market Trends and Risk Management

Market volatility is a significant factor in retirement planning. Historical trends show substantial market downturns can occur rapidly, highlighting the need for a risk-aware investment approach. As time passes since major financial crises, there's a risk of investor complacency. Acknowledging and planning for potential market fluctuations is crucial in safeguarding retirement funds.

Understanding Market Valuation and Interest Rates

The valuation of the market, often influenced by decisions made by central banks like the Federal Reserve, especially regarding interest rates, plays a critical role in retirement planning. Overvaluation of the market and fluctuating earnings projections can impact investment strategies. Recognizing these factors can aid in making informed decisions for retirement portfolios.

Key Strategies for Retirement Security

To achieve a secure retirement, certain strategies and principles should be considered:

Additional strategies include understanding market dynamics, diversifying investments, and regularly reviewing and adjusting financial plans.

The Hidden Impact of Fees

One often overlooked aspect of retirement planning is the impact of fees on long-term savings. Many individuals are unaware of the fees they incur, especially in investment products like mutual funds and employer-sponsored plans such as 401(k)s. Reducing these fees can lead to significant savings over time.

The Value of a Structured Retirement Plan

A structured retirement plan is critical. It should include a thorough risk assessment, an analysis of fees, and a comprehensive strategy tailored to individual needs and goals. A well-constructed plan provides clarity and a roadmap for achieving retirement objectives.


Effective retirement planning requires a multifaceted approach, balancing risk management, financial efficiency, and a deep understanding of market conditions. By adopting key strategies and maintaining a focus on long-term goals, individuals can enhance their chances of a financially secure retirement

The process involves regular review and adaptation to changing circumstances, ensuring that retirement funds are not only accumulated but also protected and optimized for the long haul.

Take a minute to watch this video for important information on long-term care, a topic everyone needs to be ahead of.

Long-term care (LTC) is a critical aspect of health and personal care that affects a significant portion of the population. Statistics indicate a high probability—around 70%—that an individual or their spouse will require long-term care at some point. This statistic underscores the importance of understanding what long-term care entails, its costs, and how to prepare for it.

What is Long-Term Care?

Long-term care refers to a variety of services and supports tailored to meet an individual’s personal care needs over an extended period. Contrary to common misconceptions, most long-term care is not medical in nature. Instead, it predominantly involves assistance with everyday activities crucial for daily living.

Activities of Daily Living (ADLs)

Activities of Daily Living, or ADLs, are fundamental tasks that most people perform daily without assistance. These include:

Instrumental Activities of Daily Living (IADLs)

Instrumental Activities of Daily Living, or IADLs, are tasks that are somewhat more complex than ADLs and are essential for independent living. These include:

The Cost of Long-Term Care

The cost of long-term care can vary significantly based on several factors:

Age Factor in Premium Costs

The initial premium level for long-term care insurance tends to increase with the age of the applicant. Younger individuals typically face lower premiums, highlighting the advantage of planning for long-term care early.

The Challenge of Qualification

Qualifying for long-term care insurance becomes more challenging with age. Statistics show that 1 in 4 applicants between the ages of 60 and 69 do not qualify for such insurance. This statistic is a stark reminder of the importance of early planning.

The Necessity of Preparation

Given the high likelihood of needing long-term care and the associated challenges and costs, it is crucial to understand the options and prepare adequately. This preparation is not just a personal matter but also a significant consideration for families.

Why Prepare for Long-Term Care?

  1. Financial Stability: Long-term care can be expensive, and early planning can help in managing these costs more effectively.
  2. Quality of Life: With proper care, the quality of life in later years can be significantly improved.
  3. Family Peace of Mind: Knowing that there is a plan in place can provide peace of mind to both the individual and their family members.
  4. Independence: Adequate preparation can help maintain independence for as long as possible.


Understanding and preparing for long-term care is a critical aspect of life planning. Given the high probability of needing such care, it’s prudent to start planning early. This includes understanding what long-term care entails, evaluating insurance options, and considering personal and family needs. By taking proactive steps today, individuals can ensure they have the support and resources they need to maintain their quality of life and independence in the future.

The Little Red Book of Retirement Chapter 1


Retirement planning is a topic of paramount importance, especially for high net worth individuals. The first chapter of "The Little Red Book of Retirement" offers critical insights into the unique retirement planning needs of these individuals. This chapter lays the foundation for understanding how high net worth clients can strategically manage their wealth for a secure and fulfilling retirement.

Understanding High Net Worth Retirement Needs

High net worth individuals, typically defined as those with a net worth exceeding $1 million, face unique challenges and opportunities in retirement planning. This chapter emphasizes that their retirement strategy needs to go beyond basic savings and investment plans. It should encompass a comprehensive approach that considers various financial and lifestyle aspects.

Key Components of High Net Worth Retirement Planning

  1. Customized Investment Strategies: High net worth individuals benefit from investment plans tailored to their specific financial goals, risk tolerance, and time horizon. These customized strategies often include access to exclusive investment options like separately managed accounts (SMAs).
  2. Tax Efficiency: Effective retirement planning for the affluent involves sophisticated tax strategies. This can include tax-loss harvesting, timing of income, and considering the tax implications of various retirement accounts.
  3. Estate and Legacy Planning: This chapter highlights the importance of estate planning in securing and managing wealth for future generations. This involves structuring assets to reduce estate taxes and setting up trusts or other legal structures.
  4. Diversification of Assets: Diversifying investment portfolios to include a mix of asset classes is crucial for high net worth individuals. This approach helps in mitigating risks and achieving more stable long-term returns.
  5. Retirement Income Strategies: The chapter delves into strategies for ensuring a steady and sustainable income during retirement. This includes determining the optimal withdrawal rate from retirement accounts and potentially leveraging annuities or other income-generating investments.

The Role of Financial Advisors in High Net Worth Retirement Planning

The first chapter of the book underscores the importance of partnering with specialized financial advisors. These professionals bring expertise in managing complex financial portfolios and can provide invaluable guidance on investment strategies, tax planning, estate management, and retirement income planning.


Chapter 1 of "The Little Red Book of Retirement" provides a comprehensive overview of the critical aspects of retirement planning for high net worth individuals. It emphasizes the need for a tailored approach that addresses the specific financial and lifestyle goals of the affluent. By understanding these key principles and working with experienced financial advisors, high net worth individuals can effectively navigate the challenges of retirement planning, ensuring financial stability and a fulfilling post-career life.


Welcome, readers, to this insightful article on revolutionizing retirement planning. In today's discussion, we will explore key concepts from a recent book focusing on retirement preparation. Over a series of articles, we will delve into the core principles that aim to reshape how we approach retirement.

A Personal Insight

In 1995, one individual entered the financial advisory business with dreams of making a difference in the lives of retirees. Little did they know that a deeply personal experience would significantly impact their outlook on financial planning. This poignant story demonstrates the importance of comprehensive retirement planning.

The Shortcomings in Retirement Planning

Many individuals may find themselves lacking the necessary knowledge and resources to navigate retirement planning effectively. Traditional financial advisors often concentrate on asset allocation, presenting visually appealing charts that may not provide the best protection against capital loss during retirement.

Diversification Alone Falls Short

During the 2008 financial crisis, many retirees discovered the limitations of traditional diversification strategies. Despite being told that a balanced portfolio of stocks and bonds was a conservative approach, they experienced substantial losses. These events highlighted the need for more robust retirement planning.

The Call for a Comprehensive Approach

To address the shortcomings in retirement planning, a more comprehensive and integrated strategy is essential. This approach goes beyond traditional asset allocation and introduces the concept of a "retirement income distribution plan." This plan is designed to stress-test assets, minimize fees, and provide a customized roadmap for each individual's unique financial situation.

Diversify Across Strategies

Diversification should extend beyond asset classes and encompass various investment strategies. For instance, real estate investments can provide stability since they often perform independently of the stock market. By incorporating such non-correlated assets into your portfolio, you can reduce vulnerability during market downturns.

Implementing Risk Management

Diversification alone may not be enough to protect your portfolio during market volatility. Implementing risk management strategies is crucial. One such strategy is a "stop loss" mechanism, which caps losses at a predetermined percentage. This approach acts as a safeguard against significant portfolio declines during turbulent market conditions.


In this article, we have explored innovative concepts in retirement planning that aim to improve financial security during one's retirement years. The emphasis has been on comprehensive, integrated planning that surpasses traditional asset allocation. 

The goal is to protect against risk and enhance returns for a more secure financial future. Stay tuned for the upcoming articles in this series, where we will delve deeper into these innovative strategies.

Click on the link to watch the attached video to learn more about: What are RMD's and How are they Determined?

When it comes to retirement planning, understanding Required Minimum Distributions (RMDs) is crucial. Essentially, RMDs are the minimum amounts that a retirement plan account owner must withdraw annually, starting with the year they reach 70.5 years of age or, if later, the year they retire.

What Are Required Minimum Distributions?

RMDs apply to tax-deferred retirement accounts. These accounts include IRAs, 401(k)s, 403(b)s, and other defined contribution plans. The rationale behind RMDs is straightforward: since contributions to these accounts are often tax-deductible, and the growth in the accounts is tax-deferred, RMDs ensure that this untaxed money is eventually subject to taxation.

How Are RMDs Calculated?

The amount of an RMD is determined by dividing the account balance as of December 31 of the preceding year by a life expectancy factor set by the IRS. For example, at age 70, the life expectancy factor is 27.4 years. This means if a retiree has a retirement account balance of $100,000 at the end of the year, their RMD would be approximately $3,649 (100,000 divided by 27.4).

Important Timelines

Impact on Retirement Planning

Understanding and planning for RMDs is a critical component of retirement planning. Failure to take an RMD, or withdrawing too little, can result in significant penalties – typically 50% of the amount that should have been withdrawn. Hence, it's essential for retirees to:

Recent Changes and Considerations

As of my last update in April 2023, there have been changes to the rules governing RMDs:

Special Cases and Exceptions

Tax Implications

RMDs are taxable as ordinary income in the year they are withdrawn. Tax planning strategies, such as spreading out large expenses or deductions over several years, can help manage the tax burden associated with RMDs.


Required Minimum Distributions are a key aspect of retirement planning, especially for those with tax-deferred retirement accounts. Understanding how they are calculated, the timelines involved, and the strategies for managing them can have a significant impact on retirement income and taxation. With careful planning and, if necessary, professional advice, retirees can navigate RMDs effectively to optimize their retirement finances.

For a more personalized approach to RMDs and retirement strategy, consulting with a financial advisor is recommended. They can provide tailored advice and calculations based on individual circumstances, ensuring a comfortable and financially secure retirement.

Click on the link to watch our interactive video to quickly and simply understand: How to Strategize for your Social Security Benefits. 

Social Security serves as a foundational element in many retirement plans, and understanding how to strategize for maximum benefits is crucial. With increasing life expectancies, retirement can last between 20 to 30 years, making Social Security planning more critical than ever. This blog explores the strategies for optimizing Social Security benefits, helping ensure a financially secure retirement.

1. Understanding the Basics of Social Security

The Social Security system in the United States is designed to provide financial support to individuals in their retirement years. The amount of benefit one receives is based on their 35 highest-earning years of work. The full retirement age (FRA) – the age at which one is eligible for full benefits – varies from 66 to 67, depending on the birth year.

2. Deciding When to Claim Benefits

The age at which you start claiming Social Security benefits significantly impacts the amount received. Claiming benefits at the earliest age of 62 results in a reduction of at least 25% compared to waiting until the full retirement age. Conversely, delaying benefits past the FRA up to age 70 leads to an increase in benefits, with a maximum increase of 32% at age 70.

Case Study:

For example, if the retirement income at age 66 is $2,000 per month, retiring at this age versus waiting until age 70 can mean a difference of over $200,000 over a lifetime. This stark difference underscores the importance of timing in Social Security planning.

3. Coordinating Benefits with Your Spouse

Couples have additional strategies available. Spouses can claim benefits based on their work record or receive up to 50% of their spouse’s benefit at full retirement age, whichever is higher. Coordinating the timing of benefit claims can maximize total household Social Security income. For example, the lower-earning spouse might start benefits earlier, while the higher-earning spouse delays benefits to increase the survivor benefit.

4. Consider Work and Earnings

Working while receiving Social Security benefits before reaching the full retirement age can temporarily reduce your benefits. Understanding these rules is vital for those planning to work part-time in retirement. After reaching the full retirement age, however, earnings do not affect Social Security benefits.

5. Taxation of Social Security Benefits

Up to 85% of Social Security benefits can be taxable, depending on your total income. Planning for tax implications is essential. Strategies like Roth IRA conversions or timing the withdrawal of retirement accounts can impact the taxation of Social Security benefits and overall retirement income.

6. Asset Repositioning for Tax Efficiency

Repositioning assets to reduce taxable income can lead to more tax-efficient retirement income. This might involve shifting from taxable accounts to Roth IRAs or employing tax-loss harvesting strategies. This repositioning can influence the taxation of Social Security benefits, potentially leading to lower overall tax liabilities.

7. Seeking Professional Advice

With over 500 possible combinations of factors affecting benefits, consulting a financial advisor who specializes in Social Security planning is highly recommended. An advisor can offer customized strategies based on individual circumstances and help navigate the complex rules of the Social Security system.

Conclusion: A Tailored Approach for Optimal Benefits

Social Security planning should be a personalized process, reflecting individual work histories, health status, family circumstances, and retirement goals. The decision on when to claim benefits is a pivotal one, with long-lasting financial implications. 

Understanding the nuances of the Social Security system and employing strategic planning can make a significant difference in retirement income, ensuring a more secure and comfortable retirement phase.

As retirements grow longer, the importance of maximizing Social Security benefits cannot be overstated. It's not just about when to start claiming benefits but how to integrate them with other retirement income sources, tax planning, and spousal benefits. Informed decisions and strategic planning in this arena are invaluable for achieving a financially stable and fulfilling retirement.

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