The one big question asked by almost every baby boomer that has a nest egg is, ” Will my nest egg be enough to live on in my retirement?”

This is one of the initial questions in Greg Heiple’s new Book BalanceZone Investing. Although he puts it another way. “How do I make sure that I do not out-live my saving?”

Greg is the creator of The Teeter Totter Principle which I have already mentioned on this blog as being an excellent tool for understanding and managing your nest egg.

BalanceZone is version 2.0 of the Teeter Totter Principle. It comprises a 214 page book that goes into some detail to explain what BalanceZone Investing is all about. Plus there are two software programs.

He talks a lot about navigating the “Investment-to-Retirement Road” and says that with an understanding of BalanceZone Investing and by using its tools you should be able to successfully navigate your way to retirement income success.

The software comprises two programs.

• BalanceZone Investment Decision Skill Builder
• Investment Statement Consolidator

The main theme you need to grasp is that you should always separate risk-based assets like equities from safe assets like bonds. Greg says you need to categorize your assets into two parts: safe savings and risk investments.

The Skill Builder is designed to help you learn how to manage the balance between the two categories over time. In the process of using the Skill Builder you will learn what risk tolerance you really are comfortable with especially when you see your nest egg reducing because you risk too much or the risk based results suddenly take a large portion of your nest egg simulating a stock market decline.

The Skill Builder does:

• A great job of managing fear and wise buy and sell decisions.
• It educates Baby Boomers on how much money they can take from their nest egg without depleting it.

Once you have built your skills using the Skill Builder you can then use the Investment Statement Consolidator to enter all the totals from your different investments into either the safe or the risk Account columns. It will then give you a current picture of your BalanceZone.

If that BalanceZone is not what you are comfortable with based on your Skill Builder training you need to then plan how you are going to adjust your investments to achieve the BalanceZone you want. You can either do this yourself or with your trusted financial planner

There are a couple of important points worth making here. Greg says it is important to watch the BalanceZone Balance NOT the $ Balance. I have also said on this blog that by watching the $ balance of a Portfolio the safe assets can hide the risk-based assets losses so you get lolled into a false sense of security.

Right now in Australia we are told the average loss on a Balanced Portfolio is only -6.4%. But I have shown that my friend’s portfolio is down 22.9% on his risk-based assets. This is what you need to find out about your portfolio.

The BalanceZone Skill Builder can be used for FREE at Balance Zone Investing. I strongly urge you all to try it and learn how to balance safe and risk-based assets in your nest egg.

As soon as I have the details on where to get the book and the software programs I will let you know.

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Here is my latest bates retirement income strategy model #2. You can check out retirement income strategy model #1 and compare them.

As I learn more from my research I find the picture of what I need to do becomes clearer. So I have decided to revise my model and it is shown below.

This is what I think will work for me. It may not suit all Baby Boomers but I find simple diagrams and pictures give me a better understanding of what I need to achieve.

(A large diagram is displayed later in the Post)

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The Financial Planning industry has a problem. They want to avoid a large loss of money from their funds under management as Baby Boomers move into retirement and become risk averse, especially in this economic climate.

I read with interest this weekend that in Australia where interest rates are as high as 8.25% on term deposits a whole bunch of fund mangers are now marketing a series of term deposit accounts through their investment platforms.

According to Leng Yeow of the Financial Review the fees for these “deposit account funds” can be as high as 1.55%. Why on earth would you pay a fund 1.55% to have them put your money into a term deposit account? And why would you allow some of that money to be paid as commission to a financial planner supposedly to advise you on your term deposit. In my often to be repeated phrase - it makes no sense to me. Read the rest of this entry »

A Baby Boomer friend of mine has sent me his WRAP Account results through to June 2008. We both decided in November 2006 that we would hand our retirement nest eggs over to the “Professionals” so we could spend our time doing other things as we move into semi-retirement.

Our retirement nest eggs were put straight into a diversified portfolio of mutual funds within a few days of giving our financial planner our money.

It turns out that our timing could not have been any worse. From November 2006 through to November 2007 the markets became more volatile. Property was in the doldrums already but then we got hit with International fixed interest losses because the Aussie dollar was rising against the US Dollar. Then we got hit again with dropping interest rates in the USA. The International share losses offset the Australian share gains to give us zero returns.

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The Teeter Totter Principle is all about using a “seesaw” to balance your Nest Egg’s cash and investments. Greg Heiple a financial planner, created the Teeter Totter Principle for managing your Retirement Nest Egg after seeing what happened to some of his clients in the 2000-2003 stock market down-turn. He gives an example of of a couple retiring in 1999 and doing all the recommended things with their Nest Egg but ending up losing 30% of their Nest Egg by 2003. He realised there must be a better way to manage his clients Nest Eggs in retirement. His research led to the creation of the Teeter Totter Principle.

Don’t be fooled by its simplicity. It is a great tools for protecting your Nest Egg in Retirement.

The Teeter Totter Principle has several benefits for Retirees:

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