September-October 2014 | DON'T LET THE SUN SET ON YOUR RETIREMENT

DON'T LET THE SUN SET ON YOUR RETIREMENT
Matt and Sharon Repass with TrimperDON'T LET THE SUN SET ON YOUR RETIREMENTDON'T LET THE SUN SET ON YOUR RETIREMENTDON'T LET THE SUN SET ON YOUR RETIREMENTDON'T LET THE SUN SET ON YOUR RETIREMENTMatt Repass, Managing PartnerJohn Stern, Founding PartnerDan O’Connell, PartnerGigi LeKites, Financial AdvisorTim Gonzales, Certified Financial PlannerDON'T LET THE SUN SET ON YOUR RETIREMENT

COVER STORY

DON'T LET THE SUN SET ON YOUR RETIREMENT

Having seen financial management from every conceivable angle, PKS Investment Advisors' Matt Repass is able to offer sound investment strategies designed to make your future golden

Written By: Nick Brandi | Photographer: Grant L. Gursky

According to U.S. News & World Report, there are 75 million baby boomers (approximately one-fourth of the population) who are on the verge of retirement. That’s an average of 10,000 people a day turning 65 over the course of the next 20 years. The decisions they make between now and then are critical not only for their own futures but for the entire U.S. economy. Is it any surprise, then, that in a recent poll of Americans ages 44 to 75, a sobering 61 percent said that running out of money was their number-one fear? (Fear of death was 39 percent.)

“I’ve seen managing assets for and during retirement from all sides,” said Matt Repass, senior partner, Registered Financial Consultant and Certified Retirement Financial Advisor of PKS Investment Advisors. “I’ve worked in both the insurance and investment arenas since 1986, so I am well versed in the pluses and minuses both disciplines provide our clients.

“Many investors believe that because the market is ‘in recovery’ that they are safe to go it on their own,” said Repass, “but history has shown time and time again that the onset of a recovery cycle is precisely when people need sound financial counseling and constructive asset management the most.

“An example of the confidence the public feels as the market grows is reflected in the attendance of my ‘Rejuvenate Your Retirement’ classes, which  I hold for retirees around the area,” Repass continued. “In 2008, when the market was in turmoil, my classes were at maximum capacity, with waiting lists for space. Most recently in this market recovery, I have seen enrollment fall by half, but this is nothing new, as I’ve witnessed this over and over throughout my career.”

Repass went on to explain that while the fundamental rule of securities and stocks is to buy low and sell high, the people tend to panic and dump stocks when their price is declining and then be overly cautious before investing in stocks that may have been on the rise for weeks, months or even years.

“As investment advisors who manage money with a philosophy grounded firmly in academics and Nobel Prize-winning methodology,” said Repass, “it is our practice not to react emotionally but instead encourage our clients to stay the course, follow their personalized allocation and most important, rebalance their accounts to their prescribed allocations.”

Repass is certainly not alone in PKS’ efforts to combat many Americans’ greatest fear. He’s joined by colleagues John Stern, CPA/PFS, managing partner of PKS & Co, PA; partner Dan O’Connell, CPA/PFS, CVA; Tim Gonzales, CFP®, AAMS; and Gigi LeKites. Together, this elite team of financial counselors oversees more than $150 million in assets.

So, how does this well-versed financial firm help Americans overcome this growing fear of running out of money?

“Some ‘tools’ are better-suited for certain financial goals than others,” Repass said. “It takes the best from both worlds to achieve this goal. I’ve worked to create financial plans that utilize the best tools of both disciplines: annuities for guarantees of income throughout one’s life, and globally diverse, low-cost investment portfolios to provide an inflation hedge. I call this plan ‘SWAN,’ for Sleep Well At Night.”


Annuities and insurance. “It’s estimated that only 12 percent of private industry offers a pension plan,” Repass said. “A pension plan is simply an annuity being offered by an employer. People need to know that using personally owned annuities can provide the same benefits the pension plan did but with a big advantage. Traditional pensions will pay income to the retiree and his/her spouse for the rest of their lives, but that ends upon the death of the remaining spouse. Annuities can do all of that, plus pay any remaining money to their heirs.

For those still accumulating money for retirement, the tax-deferred accumulation and tax-free income that today’s permanent life insurance policies provide offer another “tool” without all the deposit restrictions found in 401Ks or Roth IRAs.


Investment portfolios. Repass says that constructing a well-diversified investment portfolio is similar to a recipe: “You begin with the same base ingredients essential to the dish, with individual tweaks of difference for the purpose of accommodating your own unique tastes and preferences. That you may like yours spicier does not mean the base ingredients have changed; you’ve simply modified or added a little more of something to suit your taste.

“Unfortunately,” he continued, “many people think, especially when they retire, that their investments must become less risky, so they begin removing some of the base ingredients from their recipes. What this approach does in many cases is simply bring on more risk.

“Regardless of our clients’ ages, sound, academically based investment management says we don’t remove ingredients from our recipe; we simply lessen exposure to the more risky elements of the portfolio. Meanwhile, the rebalancing I mentioned earlier is another critical element of following this academically grounded methodology. Because no one can predict where any class of assets is headed, it makes sense to cover all the bases, being in all identifiable asset classes always and then rebalancing them back to our initial allocations as markets ebb and flow.”


Expenses. It has been estimated in a recent study that the average married couple lose over $155,000 of their combined 401k balances to excessive fees over the course of their careers. Conversely, a reduction of fees and expenses from 3 percent annually to 1 percent over a 30-year period results in a whopping 82 percent increase in assets.

“Most people who meet with me for the first time haven’t a clue about the expenses they pay to have their investments managed each year,” Repass said. “When I explain to them that not only should they know exactly what it costs to manage their money annually, down to the tenth of a percent, they should also know that it is possible to reduce their investment costs by 60 percent or more.


Transparency. According to Repass, there are three fundamental questions that all investors must ask themselves and know the answers to:

1. Do you know your fees and expenses? 
2. Do you know the allocations of your investments?
3. Do you know the returns on your money?

One of the virtues of the fiduciary responsibility mandated by the SEC for firms like PKS is that they remove potential conflicts of interest. This fiduciary obligation is something PKS takes very seriously, and as Repass explains: “I became a registered investment advisor in 1994, with the sole purpose of letting my clients know that I can be held personally responsible for the recommendations I make. Repass calls this transparency of costs to their clients a major aspect of their SWAN method. This is achieved by empowering their clients with education, rather than befuddling them hyperbole.


Dovetailing. The affiliation between PKS Investment Advisors and PKS & Company, Certified Public Accountants, amounts to what is effectively a boutique of essential financial services under one roof.

“This is what I had I envisioned the financial-services firm of the future to look like,” said Repass. “I always felt that if a CPA firm aligned itself with someone of my expertise and added the legal guidance of an attorney, we would have a firm capable of serving every aspect of our clients’ financial lives.



PKS INVESTMENT ADVISORS 
410-546-5600


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