The Statera Retirement Method was developed to look at retirement in a different light. Unlike the “withdrawal method” or “4% Rule” that uses your portfolio to hedge all of the retirement risks, the Statera Method looks at the retirement risks individually, and then in coordination with each other, to figure out the best balance in order to allocate your funds.
First, we determine how long we need to plan and how much income you will need to live the lifestyle you want. Using our model, we analyze how much predictable income you can expect to receive throughout retirement, no matter how long you live. This income is used to hedge your longevity risk.
We then calculate how much money you will need from your variable sources to achieve your total income need, while also factoring in increases for inflation. Using our model, we are able to calculate how much money you will need to conservatively invest today to provide for this variable income and maintain your standard of living throughout retirement. This is how we hedge your inflation risk.
Again, using our model, we calculate a proper sequence of return buffer. In the event you experience a negative sequence of return, we have “safe” assets that are not correlated to the markets from which you can draw income instead of taking it from your portfolio. This buffer is designed to allow a significant amount of time for portfolio values to recover should there be a sustained market sell-off. This is how we hedge sequence of return risk.
We then check the balance between how much is needed to hedge all these risks. We are able to analyze your situation by shifting funds between the various risks and finding the optimal way we can improve your projected outcome.
This is where specific recommendations come in. Using our model, we are able to determine what your expected total cost will be to fund your retirement and what potential “extra” assets you may have that can be invested for longer-term, potential unexpected costs, and legacy. We assign a purpose to each one of your dollars and a reason behind every recommendation. Unlike the other retirement methods that group all your assets together to hedge these risks, you will understand the purpose behind every recommendation and investment you make.
Just like a fingerprint, everyone's retirement is unique. Every plan is personalized to the individual. We work with you to design a plan that meets your needs, risk tolerance, and is properly positioned to hedge the retirement risks. The key to building a sound retirement plan is to have a proper balance between all of your assets to hedge these risks. Lastly, this is not a “set it and forget it” plan. Life does not happen in a straight line. Markets go up and down, income needs change, and inflation varies. As part of our model, we have an algorithm that analyzes your personal situation each year and helps keep you in balance throughout your retirement journey.