Congratulations! We have survived a rocky start to 2016. Despite a double digit drop in the market at the beginning of the year, the markets did rebound, and they continue to offer opportunities for growth.

Speaking of growth, Allgen was sad to see Ashley, our former marketing specialist, leave in pursuit of a dream and an opportunity to live in Spain. As many of you know, Ashley was a valuable and cherished part of our team, helping us connect with you and others often throughout the year. While we miss her, we are vicariously staying connected via her blog. We wish Ashley the best in life!


Understanding that finding the right person is of utmost importance, we took our time hiring the next person to resume our marketing efforts. We are excited to announce that Cassy Morrison has joined the Allgen Team as our new Marketing Director. She brings great experience and shares our passion to see people reach financial freedom. Please feel free to welcome Cassy ( to the Allgen family!

With all of the uncertainty in the markets, we continue to emphasize the importance of monitoring your personal financial plan. As the baby boomer generation continues to retire from the workplace over the coming years, we would like to take this opportunity to comment on retirement savings. The following article highlights some thoughts and considerations for your financial freedom path.


Stop Saving for Retirement?

Main Points

* Saving for Financial Freedom should begin after the elimination of consumer debt and a fully funded emergency account and proper insurances are in place

* Emotions and procrastination are the primary causes for poor portfolio performance and delayed Financial Freedom attainment

* A financial plan is equally, if not more important than the actual returns of your portfolio

At Allgen we stopped using the term “retirement” because of its implications. Retirement may or may not be voluntary, especially if a company forces early retirement or health issues arise. Instead, we focus on financial freedom and independence, which may or may not occur in conjunction with regular retirement. Financial freedom is the point when there are enough assets and income streams to no longer depend on day-to-day job for lifestyle sustenance. Whether it be spending more time with the family or traveling, financial freedom allows one to enjoy such activities knowing that the financial part of life is secure. How do we get to this point? When is the right time to think about financial independence savings? This depends on your age, how much you will need to live, and how much you have already saved. Now is the best time to start thinking about financial independence. If you’re young, your investments have time to grow exponentially through compounding; if you’re older, you may need to increase your savings rate to achieve your independence goals; and if you’re already financially independent you want to ensure portfolio performance continues to sustain your lifestyle. So, what are the major factors to consider regarding financial freedom (assuming the Foundation steps are complete- see our website at


Time can either be your ally or your enemy. When you have more time to save, consistently investing small dollar amounts builds wealth through the ups and downs that is inherent of market behavior. On the other end of the spectrum, we are living longer. The duration of a person living after retiring has increased about 32% on average in the last 65 years.¹ A longer retirement due to work downsizing, health issues, or longer life span, puts more pressure on the savings and investments to ensure they last. In order to protect that nest egg, we look into effectively allocating the assets for sustainability.

¹Source: “Growing Older in America: The Health and Retirement Study.” The National Institute on Aging, The U.S Department of Health and Human Services.

Lifestyle Amount

Consider the amount of money needed during the Freedom stage. Statistics show that retirees typically require about 70-80% of pre-retirement income to maintain a similar lifestyle. If the average salary in the U.S. is about $53,000 per individual, the typical person would need around $40,000/year in retirement. If we multiply this by the average 18 years of retirement, one will consume approximately $1,000,000 in retirement, assuming a 3% inflation rate. One will probably need some amount of accumulated assets along with any pensions and social security to provide the Freedom lifestyle. Typically the amount of Social Security benefit or pension isn’t controllable. However, the amount one accumulates is directly related to the amount saved/invested and any gains earned.


There are various vehicles that are considered retirement accounts by the government and the financial industry. Among these are 401Ks, Roth 401k’s, IRAs, Roth IRAs, 403Bs, 457s, SEP-IRAs and SIMPLE IRAs. The IRS allows these retirement, or qualified accounts, to grow tax deferred (or certain ones tax-free). Tax deferred and especially tax-free growth is a powerful feature when building a nest egg, as compounding interest accelerates the growth of the portfolio. Albert Einstein named compounding interest the 8th wonder of the world because of the power it holds. There are typically several investment choices when using the aforementioned vehicles. To know which choices make sense for you will depend on how much time you have until retirement funds are needed and how risk averse you are to volatility. At Allgen we realize it’s not “one size fits all”, so we sit with each client to determine which vehicle(s) and savings strategy fits you best.

Emotional Investing

Research shows that two basic urges drive investor behavior: fear and greed. Both of these emotions are typically present during times of investment volatility. Rather than focusing on fundamental and objective analysis, these urges have led the average investor to greatly underperform in markets throughout history. During a 20 year period the average investor earned approximately 5.19% on their investments, while the stock market, as measured by the S&P 500, earned 9.85%. This average difference of 4.66% every year amounts to a significant difference in portfolio value at the end of 20 years.² The typical reason for this difference is that emotions lead investors to buy and sell at the wrong times. Being aware of this, Allgen focuses on providing the objectivity needed to best manage our clients’ investment portfolios.

²Source: Quantitative Analysis of Investor Behavior, Dalbar, 2015

Best Course of Action

Even in the information age, the overload of options and opinions can be overwhelming when preparing for financial freedom. Periodic assessments will determine how much one needs to invest or how volatile or “safe” a portfolio should be in order to last during Freedom. Having and following a plan allows for proper adjustments when life happens and ensures long term probability of success. A plan determines the amount, the when, the where and the how of investing.

We invite you to stay connected with Allgen’s market viewpoints and financial education. You can find us via, Facebook, Twitter, Linkedin and YouTube. We would love the opportunity to meet with you, answer any questions, and discuss your financial plan on the path to financial freedom. Happy planning!







Advisory services are offered through Allgen Financial Advisors, Inc., a registered investment advisor.

Any information provided in the blog has been prepared from sources believed to be reliable, but is not guaranteed by Allgen Financial Advisors, Inc. and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Allgen Financial Advisors, Inc. and its employees may own options, rights, or warrants to purchase any of the securities mentioned in this e-mail. This e-mail is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material.  Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.