Financial Planning for Retirement & Inheritance

Wealth management advisors and financial planners who offer portfolio management services have a lot to be excited about these days. The Dow Jones Industrial Average (DJIA) has grown more than 150% over its lowest point in 2009 and has returned tremendous value to those who have stuck it out for the long haul. The Standard & Poor’s (S&P) 500 closed a record high on news that factory growth is fueling the ongoing economic recovery. The DJIA closed recently over 16,500 points, while the New York Stock Exchange (NYSE) reported that 69% of the companies whose shares trade on the NYSE closed higher than previously.

The needs of Baby Boomers in meeting their retirement goals as well as the required planning that members of Generation X must engage in to care for older parents while providing for their own families necessitates the need for portfolio management services.

Continued Growth Fuels Need for Portfolio Management Services

The financial markets continue to add value to investor portfolios. This increase in growth and value has increased the demand for wealth management advisors and financial planning professionals who engage in portfolio management services for their clients. CNBC recently reported that wealth management firms in the U.S. have grown to just over 28,500. These firms are comprised of 2 to 8 wealth management advisors managing $25 to $50 million in assets under management.

Why is there such a demand for wealth management advisors? For one, baby boomers (born 1946-1964) are expected to inherit $8.4 trillion, with a little more than a quarter of that amount ($2.4 trillion) already received. According to the Center for Retirement Research at Boston College, the median amount of wealth per household that will be inherited will be around $335,000 and the average more than $1.5 million. With reports that many boomers face the prospect of working longer, well past the traditional retirement age of 65, newfound wealth will require careful and thoughtful portfolio management services.

Outlook for Continued Growth

Increases in personal income and real disposable income as recently reported by the U.S. Bureau of Economic Analysis suggest a continue demand for wealth management advisors. Five years of recovery and growth have created a robust stock market that has met and exceeded expectations for the U.S. economy. The rally that has propelled the DJIA above 16,500 points has persisted, despite a government shutdown, threatened fiscal crisis and default of U.S. debt. The outlook that wage growth will outpace inflation (the Bureau of Labor Statistics reports that the inflation rate for the U.S. in February 2014 was at 1.1%) will only increase the need for wealth management services. 

To start managing your finances smarter, contacted Lighthouse Financial Planning today.

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