The Starting Point: Todd and Katie’s Financial Snapshot

Todd (66) and Katie (63) have done an incredible job saving and investing over the years. Their net worth is $4.1 million, with $3.2 to $3.3 million in liquid assets. They’re ready to retire immediately and want to live on $8,500 per month, plus additional healthcare and travel expenses. Here’s a breakdown of their key numbers:

• Monthly Living Expenses: $8,500
• Healthcare Costs: $1,000/month pre-Medicare, $5,000 annually post-Medicare
• Travel Budget: $20,000 annually for 15 years
• Long-Term Care Costs: $60,000 annually per person

They also have Social Security benefits providing a steady income. Todd’s benefit is $3,400 per month, and Katie’s is $825, which will increase to a spousal benefit when she reaches full retirement age.

Analyzing Cash Flow Needs

The first step in creating the right portfolio mix is understanding their cash flow. Over the next five years, they’ll need about $600,000 from their portfolio to cover expenses. This tells us that the portfolio must prioritize liquidity and stability during these initial years while still growing enough to sustain them for decades.

Creating the Right Portfolio Mix

Todd and Katie’s current investments include funds like the Vanguard S&P 500 ETF, Fidelity 2025 Freedom Fund, and Invesco NASDAQ Fund. While these are solid choices, we needed to diversify further and adjust the risk profile to match their retirement needs.

The proposed portfolio includes a mix of:

• Growth Stocks: For long-term capital appreciation.
• Value Stocks: To balance risk and provide steady returns.
• International and Emerging Markets Funds: For diversification and exposure to global growth.
• Small Cap Funds: To capture higher growth potential.
• Bond Market and Short-Term Bond Funds: To provide stability and predictable income.

This allocation ensures that Todd and Katie have enough liquidity for the early years of retirement while still achieving growth to support their long-term goals.

Managing Risk and Tax Efficiency

One of the biggest concerns retirees face is how to weather market downturns. The portfolio is designed with 80% stocks and 20% conservative investments to provide a balance between growth and stability. The conservative portion will cover five years’ worth of expenses, giving Todd and Katie time to ride out any market volatility.

We’ve also incorporated tax strategies, including pulling from taxable accounts first and considering Roth conversions. This approach minimizes their taxable income and positions their portfolio for long-term efficiency.

Why Diversification Matters

Todd and Katie had a significant portion of their portfolio in the Invesco NASDAQ Fund, which has delivered impressive returns over the past decade. However, relying too heavily on one asset class can be risky. Diversifying into other asset classes, such as bonds, international stocks, and small caps, ensures their portfolio is resilient and not overly dependent on the performance of one sector.

Encouraging Todd and Katie to Dream Bigger

As we worked through their financial plan, one thing became clear: Todd and Katie have more than enough resources to live the retirement they’ve always dreamed of. In fact, I encouraged them to consider spending more—whether that means taking extra vacations, upgrading their home, or even gifting to family or charity.

Their disciplined saving and investing have put them in a strong position, and now it’s time to enjoy the fruits of their labor.

Final Thoughts

Your retirement portfolio should be as unique as your lifestyle. By understanding your cash flow needs, diversifying investments, and managing risk, you can create a portfolio that supports your goals today and into the future.

If you’re ready to take the next step in aligning your portfolio with your retirement vision, I’d love to help. Visit Root Financial to learn how we can create a personalized financial plan just for you.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.

Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.

The post How to Find the Right Investment Mix for Your Retirement Portfolio appeared first on ROI TV.

Mortgage Rates and Housing Affordability

As of early 2025, mortgage rates remain elevated, averaging around 6.3%, slightly below the 6.7% average in 2024 but still above historical norms. This trend continues to challenge affordability for many buyers. However, an anticipated 11.7% increase in housing inventory may provide some relief by offering more options and potentially stabilizing home prices.

nypost.com

Supply Constraints and Policy Impacts

The housing market faces ongoing supply constraints, exacerbated by potential policy decisions. For instance, proposed tariffs on construction materials from Canada and Mexico could increase building costs, further limiting new housing developments and intensifying the affordability crisis.

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Investment Strategies Amid Market Uncertainty

Despite these challenges, real estate remains a viable avenue for wealth building in 2025. Investors might consider the following strategies:

1. Diversification Across Asset Classes: Investing in a mix of residential, commercial, and industrial properties can mitigate risks and capitalize on various market segments. blog.groundfloor.com
2. Leveraging Technology: Utilizing advanced analytics and property management software can enhance decision-making and operational efficiency. blog.groundfloor.com
3. Focusing on Sustainable Properties: Investing in eco-friendly and energy-efficient buildings can attract environmentally conscious tenants and may offer long-term cost savings. blog.groundfloor.com
4. Exploring Emerging Markets: Identifying and investing in up-and-coming neighborhoods or cities with growth potential can yield significant returns. blog.groundfloor.com

Conclusion

The 2025 housing market presents both challenges and opportunities. By staying informed about market trends, policy developments, and adopting strategic investment approaches, individuals can navigate this environment effectively to achieve their financial goals.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence

The post The Truth About the 2025 Housing Market appeared first on ROI TV.