Bev and Hal were approaching retirement and were deeply concerned. Five years away from their desired retirement date, they suddenly had an uneasy feeling about how prepared they were to transition from earning money each year in the form of a salary to using the money they had saved and invested (combined with Social Security) to pay their expenses.

Bev and Hal had accumulated nearly $2.0 million in assets comprising a brokerage account, IRAs for each of them, and the value of 401(k) plans that they participated in at work. They had relationships over the years with a handful of financial professionals but wanted to consolidate down to one firm that would be able to provide them with advice and guidance as they took the plunge into retirement.

Hugh Johnson Advisors managed just over 30% of the assets Bev and Hal earmarked for retirement. The financial advisor Bev and Hal worked with at Hugh Johnson Advisors was always aware of the retirement date they had in mind and suggested that Bev and Hal complete a Retirement Income Analysis to assess the probability that, if they retired on that date and assumed a specific set of expenses that needed to be paid, their assets would be capable of carrying them through the entire length of their retirement.

Working together to craft the most accurate projection of factors impacting their retirement (e.g., assumed rates of return, assumed inflation rate, incompressible lifestyle expenses, discretionary lifestyle expenses, life expectancies, health care costs), Bev and Hal and the Hugh Johnson Advisors team determined that the combination of withdrawals from intelligently managed investments (in the proper order) and Social Security income sufficed to make the probability of achieving their desired level of retirement income reasonably high.

Bev and Hal were counseled that they must be flexible in retirement—that, given the need to remain invested in equities during what is likely to be a lengthy retirement, there will be years when negative returns reduce the value of their investments and that those years may require a reduction of discretionary spending.

Hugh Johnson Advisors also recognized that the same investment portfolio that was developed to accumulate assets may not be the same one optimally designed to support the steady withdrawal of money to pay expenses. Proposed adjustments to the overall asset allocation of Bev and Hal’s investments were discussed and accepted.

Ultimately, Bev and Hal transferred all of their accounts to Hugh Johnson Advisors and the firm’s team was able to establish a systematic withdrawal scenario that provides Bev and Hal with monthly deposits into their bank account.

Having completed several years of retirement, Bev and Hal have discovered that being retired is a bit less expensive than they had anticipated. They travel less than they thought they would and, because of an injury, do not golf as much as they used to.

Bev and Hal have the peace of mind that comes from knowing that specific and thoughtful practical strategies are being implemented to help them achieve their primary retirement objectives.

Hypothetical Example