Podcast | Season 1 | Episode 66

The Description

Find out the answer in today’s mini-episode of Reach Your Summit Podcast.

Host: Randy Morris, CFP®, ChFC®, AIF® | CEO

After graduating from the University of Colorado in 1982 with a degree in business and organizational management, he worked in Denver, Colorado, for two years as Vice-President of Executive Economic Services, Inc.

In 1985, Randy founded Executive Financial Planning, Inc. (EFP), one of Mississippi's first financial planning firms. EFP became one of the nation's largest financial planning firms during his tenure as founder and CEO.

In 2002, he created Summit Wealth Group (SWG) out of a desire to provide additional wealth management services for clients. Randy serves as the firm's CEO. Summit Wealth Group currently works with clients in 46 states with client assets under advisement of more than $1 billion, as of February 2021.

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(719) 633-4033 | 13710 Struthers Road, Suite 115, Colorado Springs, CO 80921
Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network®.

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The Transcript 

Stephanie

"Randy Morris, Certified Financial Planner and CEO of Summit Wealth Group is the host of today's mini episode. Welcome to the Reach Your Summit podcast, where we help you navigate the path to a better, more secure future."

Randy

"So this week's financial tip deals with the question of, should I be putting more money into bonds as I move toward retirement? 

I've been doing this for a number of years and, uh, during my career, uh, mortgage rates have gone way down. The interest rate I had back when I first did my, my first mortgage was 10. 5%. Uh, today mortgage rates are obviously much lower than that. So we've been through a number of years of falling interest rates.

And you say, well, what does that have to do with this question regarding bonds? Uh, well, bonds tend to, um, do well in a, in a falling interest rate environment, but when interest rates go up, bonds struggle. And so, um, for many years, uh, there's been this, um, education out there, uh, regarding this rule called the rule of 100.

And the way it works is you take the number 100, you subtract from that your age. So for example, if you're 70, uh, the number of 30 is how much you ought to have in equities or stocks. Uh, implying that the other number, which would be 70, is how much you ought to have in bonds or fixed income investments.

And for many years, with falling interest rates, it didn't hurt clients too badly. But investors, in this day and time, probably will not be well served by that rule of 100. So instead, what we would encourage you to do is take a look at your risk profile. Decide how much risk you do need to be taking during retirement.

You want to make sure that you create. a portfolio that keeps up with inflation and bonds, uh, and especially in a rising interest rate environment are probably not the best place to have the majority of your assets. So we would encourage a risk assessment to determine how much you should have in the bond category heading into those retirement years. "

Stephaie

"Thanks for listening to a mini episode of the Reach Your Summit podcast by Summit Wealth Group. If you'd like to help support the podcast, please share with others and subscribe so you don't miss an episode. Thanks again."