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Retirement Planning

Meet CAM’s Newest Managers

Eric Kyereme (left) joined Capital Asset Management, LLC on June 1, 2005 as an Asset Manager, bringing with him a loyal clientele. A native of New York, N.Y., Eric has worked for an international insurance firm and mutual fund company, and is involved in various partnerships. He has also pursued successful real estate investments in the North Shore area of Chicago and in Mid-Manhattan, and has invested in other ventures across the country.

Currently Eric serves on the Board of Chairmen for M-Tech, a German-based company that has been involved with the past three Olympic Games.

Eric focuses on managing individual portfolios comprised of equities, bonds, real estate, business ventures and commodities. Contact Eric at 812-288-2881. There is no fee for an initial consultation.

Jay Conner joined CAM in February of 2006 as an Investment Manager. A Jeffersonville native, Jay attained a BS in Financial Management from Indiana University, Bloomington, in 2002. He returned home to practice in Louisville and began his career as a Financial Planner working with a Fortune 500 firm. He soon partnered with a branch in Cocoa, Fla., for his financial planning company, and served over 1200 clients throughout Indiana, Kentucky, Florida, and Connecticut.

An avid golfer, Jay enjoys the sport frequently. He hopes to one day develop a youth golf league to teach the values instilled by golf to the community. When he is not playing golf, Jay spends time working for various developers maintaining their environmental controls at different construction sites.

Jay is a licensed Investment Advisor. Contact Jay at 812-288-2881. There is no fee for an initial consultation.

Advice from Capital Asset Management

1. Develop a Plan To develop a well-thought-out plan, one should first determine how much spending is realistically anticipated. Be honest with yourself and as thorough as possible. The investment plan should be integrated into an overall estate and tax plan that includes wills and financial/health care durable powers of attorney.

2. Don’t Overestimate Expected Returns from Equities, Bonds or Cash Some investors might be expecting double-digit equity returns. However, most financial economists are forecasting that future returns will be significantly lower. Some people may also overestimate expected returns from bonds or cash, which might be just as hazardous.

3. Don’t Assume Constant Returns Returns are not constant. Making systematic withdrawals (the kind that can be required upon retirement) during down markets can cause portfolio values to fall to levels from which they may never recover. Historically, a safe harbor withdrawal rate for a 65-year-old couple has only been about 4%.

4. Don’t Underestimate Investment Horizons People often consider their investment horizon as the number of years to retirement — instead of the rest of their lives. Couples should consider the life expectancy of the second-to-die — which is greater than that of either spouse.

5. Don’t Overestimate the Ability to Continue Working Some people have the good fortune to retire early. Unfortunately, other reasons may force an individual to take early retirement (e.g., leaving the work force due to health reasons, loss of job, or taking full-time care of a spouse or parent). A good retirement plan considers contingencies.

6. Don’t Become Too Conservative with Investments Too much of a “safe” thing may be imprudent because of the risk of inflation. While inflation can erode the return on bonds, an equity allocation can provide a hedge against inflation.

7. Don’t Rely Too Heavily on Social Security By now, everyone is aware of the major challenges facing both the Social Security and Medicare programs. Therefore, it would be imprudent to count too heavily on Social Security as the main source of income in retirement.

8. Don’t Underestimate the Tax Rate People often assume that their tax rate will be lower in retirement than actually proves to be the case.

9. Ensure that Assets are Available for a Spouse Couples should take into account that upon the death of a spouse, Social Security benefits will be reduced. Although living expenses will be reduced, the reduction in income should be considered. Also, consult an expert when deciding on payment options from a work sponsored defined benefit plan.

10. Don’t Underestimate the Need for Long-Term Health Care Estimates indicate that there is nearly a 50% chance an individual will eventually require 24-hour skilled nursing care in a long-term care facility. In 2005, the average rate for a private room in a nursing home was more than $200 a day, or about $74,000 a year.

Capital Asset Management was founded in 2000 by the partners of McCauley, Nicolas & Company, LLC. CAM is a registered investment advisory firm providing investment services and solutions for high-net-worth individuals, trusts, charitable organizations, businesses and qualified retirement plans. Greg Rogers is a co-owner and principal of CAM and Ron Barnes is CAM’s president. More information on CAM’s philosophy and services is online, www.camadvisors.com/.

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