As you approach retirement, the traditional investment advice you often hear leans towards minimizing risk by shifting from equities to bonds. However, at Brickley Wealth Management, we take a nuanced approach to equity exposure that considers not just the age but the entire financial picture of our clients.
Why Maintain Equity Exposure?
Equity exposure is pivotal in a retirement portfolio for several reasons. While it subjects one to more risk, equities also offer the potential for more growth over the long-term, which may help one to maintain purchasing power and support a longer lifespan. For clients who have substantial assets, such as a fully paid house, significant investment savings, or reliable pension schemes, the risk associated with equities can be more manageable. This capability to "afford" more risk allows for greater growth opportunities in their investment portfolios.
Equities are particularly beneficial for clients who plan to leave a legacy through inheritance or charity. By increasing equity exposure, we aim to enhance the potential growth of their assets over time. Understanding that market fluctuations can lead to value decreases, our goal is to design a portfolio that aligns with their risk tolerance while providing education to the client on how to navigate periods of volatility so they can meet their long term objectives.
Tailoring to Individual Needs
At Brickley, our approach is not a one-size-fits-all. Each client's portfolio is tailored to their specific financial situation, goals, and risk tolerance. For example, a younger client with a stable income and a high tolerance for risk might benefit from a portfolio with 80-100% equity exposure. In contrast, an older client who is sensitive to market volatility might prefer a more conservative approach, balancing equities with higher bond allocations.
Our strategy involves detailed discussions with clients about their comfort with various market scenarios, adjusting their exposure to align with their personal financial goals and risk tolerance.
The CPA and Investment Advisor Lens
As CPAs and investment advisors, we analyze how investments can be structured to optimize tax efficiency—whether in tax-deferred accounts like 401(k)s and IRAs or taxable accounts. For investments within retirement accounts, the focus may be on growth, as potential taxes are deferred until withdrawals are made. For taxable accounts, the strategy may shift towards minimizing current year tax liabilities through tax-efficient investments like exchange-traded funds (ETFs). In general, these investment vehicles may minimize taxable distributions compared to mutual funds. We proactively manage the potential tax consequences of selling investments, using strategies like loss harvesting to offset gains and reduce taxes.
Brickley's Unique Edge
What sets Brickley Wealth Management apart is our ability to execute sophisticated tax and investment strategies seamlessly. Unlike larger firms where tax and investment advice may be siloed, we offer a coordinated approach that considers the short and long-term tax implications of every investment decision.
Our firm's ability to integrate deep tax experience with wealth management allows us to manage not just the investments but also the intricate tax details that come with them. This integrated approach ensures that our clients receive a holistic service while attempting to minimize surprises.
Maintaining equity exposure in a retirement portfolio is an important consideration over the long term. At Brickley, we provide personalized investment strategies that are enhanced by tax planning. By doing so, we hope to not only meet our clients’ financial expectations in retirement, but exceed them.
At Brickley, we take a comprehensive and customized approach to create a plan that considers the present and the big picture.
Investing involves risk and possible loss of principal capital. Consult a fiduciary investment professional to help you evaluate any personalized investment decisions.
–––
Brickley Wealth Management is a Registered Investment Adviser*. Advisory services are only offered to clients or prospective clients where Brickley Wealth Management and its representatives are properly licensed or exempt from licensure. The information throughout this website is solely for informational purposes. The content is developed from sources believed to provide accurate information, and we conduct reasonable due diligence review however, the information contained throughout this website is subject to change without notice and is not free from error. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Readers should conduct their own review and exercise judgment prior to investing and should carefully consider their own investment objectives and not rely on any post, chart, graph or marketing piece to make a decision. No investment or tax advice may be rendered by Brickley Wealth Management or Brickley & Company unless a client service agreement is in place. We are not providing any personalized investment advice through this website. Please consult your investment, tax, or legal advisor for assistance regarding your individual situation. Brickley Wealth Management does not provide legal advice, and nothing in this website shall be construed as legal advice. For more information on our firm and our advisers, please see the latest Form ADV and Part 2 Brochures and our Client Relationship Summary https://adviserinfo.sec.gov/firm/summary/287487. For a copy of our Privacy Notice, please go here.
*Please note that the term "registered investment adviser" and description of our firm and/or our associates as "registered" does not imply a certain level of skill or training.