September 25, 2015

Award winning financial planner Erin Botsford believes traditional retirement approaches including heavy reliance on stock and bond investments, asset allocation strategies and set annual withdrawals are unreliable and in some cases downright dangerous. Instead the CEO and founder of The Botsford Group relies on guaranteed sources of income to pay for life’s necessities.

WEALTHTRACK Episode #1214; Originally Broadcast on September 25, 2015
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Consuelo MackFederal Reserve policy makers decided not to raise interest rates on September 17th but it turns out Chairwoman Janet Yellen is in favor of a rate hike this year. She made a detailed case for a rate hike in a long speech at the University of Massachusetts in Amherst today.

As Cornerstone Macro’s veteran Fed watcher, Roberto Perli told clients after the speech “perhaps the most important news for investors is the admission that Yellen is among those FOMC members who favor a liftoff this year.” Perli went on to say that until now we have not had clarity on her views and now we do. That said Perli admits he “wouldn’t say that a liftoff by December is a very high probability event. It is a base case.”

Even with a clearer understanding of FOMC thinking no one is predicting a rapid rise in interest rates anytime soon. Therefore bond yields in the U.S. and the rest of the developed world should remain near historic lows.

The investment handwriting has been on the wall for a long time. The long-standing assumption that portfolios of stocks, bonds and some other holdings would generate 8% annual returns is no longer a given. As The Wall Street Journal reported recently “Public pension funds from California to New York are cutting investment-return predictions to their lowest levels since the 1980’s…”

According to the Journal more than two-thirds of state retirement systems have trimmed assumptions since 2008. Among 126 plans the average target is 7.68%,
the lowest annual return expectation since at least 1989. Overtime these lower assumptions are going to mean lower benefits for retirees and bigger pension liabilities for governments.

Meanwhile, according to another Journal article, the California State Teachers’ Retirement System, known as Calstrs, “The nation’s second-largest pension fund is considering a significant shift away from some stocks and bonds, one of the most aggressive moves yet by a major retirement system to protect itself against another downturn.”

According to the Journal about 55% of Calstrs’ $191 billion dollar portfolio is in stocks. As part of what it refers to as these “risk-mitigating strategies”, it’s considering “… moving as much as 12% of the fund’s portfolio… into U.S. Treasurys, hedge funds and other complex investments that they hope will perform well if markets tumble.”

This week on WEALTHTRACK we’ll talk with Erin Botsford, who is actively implementing risk mitigating strategies of her own for clients.  Botsford is a Certified Financial Planner and Founder and CEO of The Botsford Group, a boutique financial planning firm that specializes in retirement and asset protection strategies for business owners and executives.

She has been named one of Barron’s Top 100 Independent Financial Advisors and numerous times one of its Top 100 Women Financial Advisors. She has trademarked her “lifestyle-driven investing” philosophy, which she explains in her book, “The Big Retirement Risk: Running Out of Money Before You Run Out of Time”.

An independent thinker, Botsford is critical of traditional financial planning approaches such as asset allocation strategies, set systematic withdrawals and what she calls the “myth of the magic retirement number”. She will explain why stocks and bonds are not the core of her clients’ retirement portfolios and why insurance products are.

If you can’t join us for the show on Public Television this week, you can always watch it on our website, over the weekend.  You’ll also find our exclusive online EXTRA interview with Botsford about the charitable organizations she and her husband are supporting in Africa.

Thank you for watching. Have a great weekend and make the week ahead a profitable and productive one.

Best Regards,

Mathews Asia


  • Social Security now only source of lifetime guarantee for most retirees
  • Annuities provide another source of income for life

Immediate Annuities

  • Pay fixed amount every year for life
  • Starts payments immediately

Deferred-Income Annuity

  • Set future payout date
  • Later the date, the higher the payout

Kim Lankford recommends going to to do some personal calculations.


Consider equity-indexed annuities

  • Usually provide a principal guarantee
  • Limited upside participation in stock market
  • Protection against downside
  • Biggest risk is issuing insurance company
No stock mentions in this episode. This transcript will be available soon. More information regarding WEALTHTRACK transcripts can be found here

Previous appearances by Erin Botsford from the WEALTHTRACK Archives:


Award winning Financial Planner Erin Botsford isn’t just focusing on the well-being of her clients at The Botsford Group. She and  her husband are also spending time and money in Africa.

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