When it comes to your retirement, here at OCTO Capital we understand that you should have income that lasts two lifetimes and keeps pace with the cost of living. We will work with you to create a portfolio with a higher Portfolio Efficiency Ratio to handle the distribution phase during retirement.
Our portfolios seek to provide broad exposure to U.S. and international equities and global investment-grade bonds in an asset allocation framework.
Risk is primarily determined and managed through the asset allocation and extremely broad diversification of the portfolios. As the underlying funds are index funds, the returns from each portfolio should very closely approximate those for the benchmarks. Index-oriented, strategically allocated strategies historically have been very tax-efficient, which may enhance a taxable investor’s after-tax returns. These strategies have also tended to be lower-cost, relative to comparable actively managed investment alternatives. Research has shown a negative correlation between cost and returns, whereby lower-cost funds have tended to deliver higher, longer-term returns relative to higher-cost funds.* This potential for higher returns due to the portfolios’ low relative cost may benefit both taxable and tax-exempt investors.
Our goal is to create a tax-efficient withdrawal strategy that may be able to extend the longevity of your portfolio by several years. One of the more common mistakes that people make is paying tax on income they earned but did not spend. Retirees often waste a significant amount every year to unnecessary taxation. We recognize that your retirement funds (IRAs, 401(k)s, 403(b)s, etc.) represent a significant tax challenge, and we strive to help you keep more of these dollars. We will look for opportunities to withdraw funds from tax-deferred accounts when they will be subject to a lower-than-usual tax rate. Properly planned sequence of withdrawals can add the number of years to the longevity and/or value of a retiree's portfolio.
Understanding how to protect your estate for your spouse and family when a disability or death occurs can be very helpful if discussed proactively. Also with government increasing regulations, not to mention overall taxes, many families are concerned how much will actually be left to a spouse or loved ones. We can provide an educated approach to guide you through the maze of keeping more of what you have and help maintain this plan throughout retirement.
* Research demonstrating a negative correlation between investment cost and returns has been extensive. Consider, for example: Wallick, Daniel W., Brian R. Wimmer, and James J. Balsamo, 2015. Shopping for alpha: You get what you don’t pay for. Valley Forge, Pa.: The Vanguard Group. Philips, Christopher B., and Francis M. Kinniry Jr., Daniel J. Walker, 2013. Mutual Fund Ratings and Future Performance. Valley Forge, Pa.: The Vanguard Group. Financial Research Corporation, 2002. Predicting Mutual Fund Performance II: After the Bear. Boston, Mass.: Financial Research Corporation.
Main Office: 39533 Woodward Avenue Suite 305 Bloomfield Hills, MI 48304 Phone: 248-731-7729
Satellite Office: 39111 Six Mile Road Suite 120 Livonia, MI 48152 (by appointment only)