Investment Planning

Presented By

Laurence T. Hanslits, CFP®

The H Group, Inc.500 Liberty Street S.E.

Suite 310Salem, OR 97301

(503) 371-3333

Investment PlanningCommon Questions/Issues

• How long will my money be invested?

• How much fluctuation can I stand?

• How much can I spend and when?

Investment Planning

Planning for varying returns

Eight Percent Growth applied to $1,000,000Eight Percent Growth applied to $1,000,000Years

0 8.0% 1,000,000$ 16.0% 1,000,000$ 1.3% 1,000,000$ 1 8.0% 1,080,000 15.0% 1,160,000 1.5% 1,012,663 2 8.0% 1,166,400 14.0% 1,334,000 2.0% 1,027,853 3 8.0% 1,259,712 13.0% 1,520,760 3.0% 1,048,410 4 8.0% 1,360,489 12.0% 1,718,459 4.0% 1,079,863 5 8.0% 1,469,328 11.0% 1,924,674 5.0% 1,123,057 6 8.0% 1,586,874 10.0% 2,136,388 6.0% 1,179,210 7 8.0% 1,713,824 9.0% 2,350,027 7.0% 1,249,963 8 8.0% 1,850,930 8.0% 2,561,529 8.0% 1,337,460 9 8.0% 1,999,005 8.0% 2,766,452 8.0% 1,444,457

10 8.0% 2,158,925 8.0% 2,987,768 8.0% 1,560,013 11 8.0% 2,331,639 8.0% 3,226,789 8.0% 1,684,814 12 8.0% 2,518,170 8.0% 3,484,932 8.0% 1,819,599 13 8.0% 2,719,624 8.0% 3,763,727 8.0% 1,965,167 14 8.0% 2,937,194 8.0% 4,064,825 8.0% 2,122,381 15 8.0% 3,172,169 8.0% 4,390,011 8.0% 2,292,171 16 8.0% 3,425,943 8.0% 4,741,212 8.0% 2,475,545 17 8.0% 3,700,018 8.0% 5,120,509 8.0% 2,673,589 18 8.0% 3,996,019 8.0% 5,530,149 8.0% 2,887,476 19 8.0% 4,315,701 7.5% 5,972,561 8.0% 3,118,474 20 8.0% 4,660,957 7.0% 6,420,503 8.0% 3,367,952 21 8.0% 5,033,834 6.5% 6,869,939 8.0% 3,637,388 22 8.0% 5,436,540 6.0% 7,316,485 9.0% 3,928,379 23 8.0% 5,871,464 5.5% 7,755,474 10.0% 4,281,933 24 8.0% 6,341,181 5.0% 8,182,025 11.0% 4,710,126 25 8.0% 6,848,475 4.5% 8,591,126 12.0% 5,228,240 26 8.0% 7,396,353 4.0% 8,977,727 13.0% 5,855,629 27 8.0% 7,988,061 3.5% 9,336,836 14.0% 6,616,861 28 8.0% 8,627,106 3.0% 9,663,625 15.0% 7,543,221 29 8.0% 9,317,275 1.1% 9,953,534 16.0% 8,674,704 30 10,062,657$ 10,062,657$ 10,062,657$

Average 8.0% 8.0% 8.0%

8%Low then High

8%Straight

8%High then Low

8% Growth8% Growth

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Eight Percent Growth applied to $1,000,000Eight Percent Growth applied to $1,000,000with $80,000 Annual Distribution

Years0 8.0% 1,000,000$ 16.0% 1,000,000$ 1.3% 1,000,000$ 1 8.0% 1,000,000 15.0% 1,080,000 1.5% 932,663 2 8.0% 1,000,000 14.0% 1,162,000 2.0% 866,653 3 8.0% 1,000,000 13.0% 1,244,680 3.0% 803,986 4 8.0% 1,000,000 12.0% 1,326,488 4.0% 748,106 5 8.0% 1,000,000 11.0% 1,405,667 5.0% 698,030 6 8.0% 1,000,000 10.0% 1,480,290 6.0% 652,932 7 8.0% 1,000,000 9.0% 1,548,319 7.0% 612,108 8 8.0% 1,000,000 8.0% 1,607,668 8.0% 574,955 9 8.0% 1,000,000 8.0% 1,656,282 8.0% 540,951

10 8.0% 1,000,000 8.0% 1,708,784 8.0% 504,228 11 8.0% 1,000,000 8.0% 1,765,487 8.0% 464,566 12 8.0% 1,000,000 8.0% 1,826,726 8.0% 421,731 13 8.0% 1,000,000 8.0% 1,892,864 8.0% 375,469 14 8.0% 1,000,000 8.0% 1,964,293 8.0% 325,507 15 8.0% 1,000,000 8.0% 2,041,436 8.0% 271,548 16 8.0% 1,000,000 8.0% 2,124,751 8.0% 213,271 17 8.0% 1,000,000 8.0% 2,214,731 8.0% 150,333 18 8.0% 1,000,000 8.0% 2,311,910 8.0% 82,360 19 8.0% 1,000,000 7.5% 2,416,863 8.0% 8,949 20 8.0% 1,000,000 7.0% 2,518,127 8.0% - 21 8.0% 1,000,000 6.5% 2,614,396 8.0% - 22 8.0% 1,000,000 6.0% 2,704,332 9.0% - 23 8.0% 1,000,000 5.5% 2,786,592 10.0% - 24 8.0% 1,000,000 5.0% 2,859,855 11.0% - 25 8.0% 1,000,000 4.5% 2,922,847 12.0% - 26 8.0% 1,000,000 4.0% 2,974,376 13.0% - 27 8.0% 1,000,000 3.5% 3,013,351 14.0% - 28 8.0% 1,000,000 3.0% 3,038,818 15.0% - 29 8.0% 1,000,000 1.1% 3,049,982 16.0% - 30 1,000,000$ 3,003,420$ -

Average 8.0% 8.0% 8.0%

8% 8%8%Straight High then Low Low then High

8% Growth with $80,000 Annual Distribution8% Growth with $80,000 Annual Distribution

$(500,000)

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Horsetail Chart of Random Series of Returns Horsetail Chart of Random Series of Returns Based on 8% Growth with 12% Std DeviationBased on 8% Growth with 12% Std Deviation

-10000000

-5000000

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

Retirement Planning

How do I protect against market downturns?

Divide Money into 3 buckets

• Short term (1 to 3 years)• Mid term (3 to 7 years)• Long term (7 years out)

Short Term Money

• 1 to 2 year CDs• T-Bills• Money Market

Mid Term Money

• 3 to 5 year CDs• Mid term treasuries• Annuities

Long Term Money

• Stocks/Bonds• Real Estate• Commodities

Managing your “Buckets”

Periodically replenish your short and mid term buckets when you have gains in your

long term bucket.

How Much Should I Spend?

• Rule of Thumb – Only take 4% of portfolio

• Lower for younger ages (3%)• Higher for older ages (5%)

How should I be invested?

Depends on how close you are to retirement and how much you need from your portfolio.

Sample Portfolios

10 years or longer from retirement

May 3, 2023 Page18

Investment PolicyInvestment Policy

Bonds12%

Money Market3%

Commodities6%

Real Estate12%

Stocks67% `

Sample Portfolios

5 years from retirement

May 3, 2023 Page20

Investment PolicyInvestment Policy

Bonds32%

Money Market3%

Commodities5%

Real Estate9%

Stocks51%

Sample Portfolios

At retirement

May 3, 2023 Page22

Investment PolicyInvestment Policy

Bonds52%

Commodities3%

Real Estate7%

Stocks35%

Money Market3%

Investment PlanningCommon Questions/Issues

• How long will my money be invested?

• How much fluctuation can I stand?

• How much can I spend and when?