A First Foundation Blog

Holistic retirement and long-term investment planning

Saving for retirement shouldn’t be about achieving some specific dollar amount, or even about specific investments to get there. It’s about figuring out what retirement means to you, and making sure retirement is both affordable and meets your lifestyle goals in a meaningful way. Then, deciding on how to get there by designing a holistic strategy that treats your retirement portfolio as the sum of all the parts. Benjamin Franklin once said: “By failing to prepare, you are preparing to fail.” That is especially true when it comes to retirement. But retirement planning, or as we like to call it, lifestyle planning, doesn’t have to be scary, nor volatile.

Sometimes investors and advisors get too lost in the mechanics of investment planning to realize that what they need is not necessarily a retirement portfolio that will achieve some pre-set numeric goal but one that will address the real-life wants and needs that an investor faces.

A holistic strategy is not just about investments

A holistic retirement strategy favors income generation over capital growth when an investor is approaching retirement. That could mean accepting a slightly lower rate of return on your retirement investments, but it also means fewer concerns about market volatility and less worrying about future income.

For example, a lot of pre-retirees and retirees were spooked earlier this year when volatility returned to the markets with a vengeance, but just as quickly that volatility died down to normal levels. See the chart below.

Chart 1

Source: WSJ Markets Data Group

The point is, if you were invested in a long-term portfolio that appropriately addressed your goals and future income needs, you wouldn’t be worried about pulling your money out of the stock market just to avoid bursts of volatility or short-term downturns in the market. The chart below gives you an idea of the opportunity costs of trying to time the market.

Chart 2

Source: Yahoo Finance

A durable portfolio

A holistic strategy would provide you with a durable portfolio that was designed to weather markets storms and achieve competitive returns by connecting each investment as part of an overarching financial plan – a portfolio in which protection of capital is a principal consideration.

Volatility is not something to fear, but rather an opportunity to purchase undervalued assets when others are selling, and to sell overvalued assets when others are buying. We believe paying a fair valuation is more critical than investing in the right assets.

A true holistic retirement strategy should include the following:

  1. Prepare long in advance of retirement. Do you know your net worth? Do you know your risk tolerance and exposure? Do you have clear goals and objectives already written out?

  2. How much income will you need to retire on? What is the lifestyle you are trying to maintain? Again, that doesn’t mean you need to come up with a dollar figure for retirement. Every investor is different, but most people fall somewhere in between 65-85% of their pre-retirement income for their retirement needs. It could be lower, especially if you plan of moving to a smaller place or moving to a different part of the country. On the other hand, if you have health issues or big plans on traveling after you retire, your costs could be higher.

  3. What are your sources of income? Aside from Social Security, do you have any other guaranteed sources of income such as pensions or fixed annuities? 

  4. Sit down with a personal financial advisor who can help you craft a robust retirement portfolio that includes rigorous investment analysis, consistency of returns, risk control, a strict valuation discipline, and access to inefficient markets. And be diligent about investing regularly in that portfolio, regardless of volatility.

  5. Together with your advisor, map out a holistic retirement plan that takes all four of the bullet points above into account, and maintains an asset allocation and income stream for retirement that supports a lifelong retirement withdrawal plan.

Saving for retirement isn’t easy, but with preparation, discipline, and a holistic strategy it doesn’t have to be volatile or scary. And it could reward you with the retirement you always dreamed of. First Foundation is there to help. Through a combination of four personalized solutions-- investment management, wealth planning, trust services and philanthropy services—First Foundation offers the type of holistic lifestyle planning that investors  will find important in shaping their future.


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by First Foundation Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from First Foundation Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. First Foundation Advisors is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the First Foundation Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: First Foundation Advisors does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to First Foundation Advisors’ web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Daniel Fan, J.D., LL.M., CFP®, Senior Managing Director – Head of Wealth Planning
About the Author
Daniel Fan, J.D., LL.M., CFP®, Senior Managing Director – Head of Wealth Planning
Daniel Fan serves as the Senior Managing Director – Head of Wealth Planning for First Foundation Advisors. In this role, he oversees the firm's Wealth Planning department and advises clients on sophisticated wealth strategies. Mr. Fan has over 15 years of experience as a Wealth Planner and specializes in evaluating and optimizing all clients' wealth plans to meet their financial needs. He works closely with all teams across First Foundation and ensures he delivers a personalized experience to support all clients. Prior to joining the firm, Mr. Fan was a Senior Vice President, Director of Wealth Planning and Insurance at First Bank Wealth Management, where he implemented the financial planning process for all business segments. He also worked as the Vice President, Regional Director, Senior Wealth Strategist at Union Bank Private Wealth Planning and as a Senior Vice President, Senior Wealth Planning Strategist at Wells Fargo Private Bank. Mr. Fan is a Certified Financial Planner® and holds his Juris Doctorate and Master's in taxation from Pepperdine University School of Law and Golden Gate University respectively. He earned his Bachelor's degree from the University of California, Los Angeles. Read more