John S. Grande, CFP

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You can enter retirement feeling confident by following the retirement cash flow steps above.

You have put years of hard work into your medical school and training, given most of your life to caring for your patients, and may now find yourself contemplating, or already in, retirement.

Transitioning from earning income to relying on your investments and other possible income sources to meet your income needs can be one of the most stressful aspects of retirement.

Below are 10 steps that may assist you in gaining a level of confidence and clarity around cash flow planning in retirement:

Know what your expenses will be in retirement. 

If you do not have a clear picture of what your monthly spending will be in retirement it is difficult to know if you have the assets and income sources to meet them. We utilize a detailed retirement expense worksheet with our clients, but you can also use an excel spreadsheet or the old yellow pad to list all of your expenses

Divide your expenses into essential expenses and non-essential expenses. 

Essential expenses would include property taxes, food, health care, utilities, etc. The non-essential expenses would include travel, hobbies, gifting, entertainment. 

 Social security, rental income, and withdrawals from retirement accounts all create taxable income that will need to be addressed.

This is to account for the increased cost of goods and services so you are not surprised by the additional income needs in the future.

List all guaranteed income sources during retirement. 

One way to reduce the potential anxiety caused by retirement cash flow is to have a high percentage of your essential expenses covered by guaranteed income sources. By having a level of predictable monthly income not tied to your investment portfolio you can ride out possible market volatility and periods of lower returns by decreasing the amount needed from your investments. Social Security, rental income, annuity income, and part-time earned income are all reliable and predictable sources of income that can be used to cover a portion of your retirement expenses.

. The income gap is the difference between your total expenses, including taxes, and your guaranteed income sources.

Once you know the amount you will need to create after guaranteed income sources you can calculate your withdrawal rate. The exact withdrawal percentage that is recommended varies but, ideally, we like to see a withdrawal rate no greater than 4%.

Create a monthly withdrawal strategy from the portfolio. 

Once the amount is determined you can structure monthly withdrawals using dividends, interest payments, and if applicable guaranteed annuity payments.

Make sure to withhold adequate taxes from the retirement accounts. 

For some income sources, like social security and retirement account withdrawals, you could determine a percentage that will be directed to the IRS and/or state to cover taxes. For other sources of income, you will want to make estimated payments to make sure you are not surprised by a large tax liability at tax time.

Have all income sources deposited into a designated account. 

Most of our clients have their social security and portfolio withdrawals directly deposited into an account that is used to pay bills and cover expenses. This gives the feel of still receiving a paycheck and helps to smoothly transition from earned income to retirement income.

Dr. and Mrs. Smith are about to retire and are planning their retirement cash flow strategy. Below are the 10 steps that were utilized to transition into retirement

1. Dr. and Mrs. Smith used a retirement expense sheet to list their overall expenses in retirement and determined what they would need to cover all of their needs and wants.

2. Next, they divided their expenses into essential and non-essential.

4. An inflation factor was used to plan for the future increase of goods and services.

5. Once they determined their gross and net income needs, they listed all of their guaranteed income sources:

Dr. Smith’s Annual Social Security:    $40,140

Mrs. Smith’s Annual Social Security: $24,000

Annual Surgical Center Income:         $30,000

6. With the expenses and taxes listed, along with the income sources, the income gap could be calculated for the Smiths.

Total Expenses:                                  $200,000

Guaranteed Income Sources:              $94,140

Total Income Gap =                             $105,860


Essential Expenses:                               $110,000

Guaranteed Income Sources:                $94,140

Essential Expense Income Gap =        $15,860

7. With the income gap calculated the Smiths reviewed their investment portfolio and calculated the withdrawal rate.

Total Income Gap:                   $105,860

Withdrawal Rate:                   $105,860/$4,250,000 = 2.49%

8. The Smiths would then work with their financial advisor to determine a strategy to withdraw the 2.49% utilizing dividends, interest payments, and if applicable annuity payments.

9. Once the specific dollar amounts are determined for the various investment accounts the Smiths would instruct their advisor to withhold federal and state tax on any accounts that would produce ordinary income, retirement accounts and annuities.

10. The last step for the Smiths to put their retirement cash flow plan in motion would be to choose a bank or brokerage account to have all of their guaranteed income sources and portfolio withdrawals deposited into so they can concentrate on enjoying retirement and not how they will pay for their monthly expenses.

Like the Smiths you can enter retirement feeling confident by following the retirement cash flow steps above.

This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Grande Financial Services, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. © 2022 Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC | Legal Disclosures | Privacy, Security & Account Protection | Terms of Use Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Any opinions are those of John S. Grande and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.

You should discuss any tax or legal matters with the appropriate professional.

Articles

One of the most stressful aspects of retirement can be transitioning from earning income to relying upon investments and other possible income sources to meet income needs.

Ten steps for planning your retirement cash flow

Being prepared for both the financial and emotional challenges that can await you in retirement will help assure that this last one-third of your life will be spent as the most rewarding.

It was Socrates who said, “An unexamined life is not worth living.” Might it also be true that an unexamined retirement is not worth living as well?

Please don’t take this to mean retirement isn’t worth living.

What we are looking at is the need for this major event to be objectively examined. We have all been disappointed at one time or another with an experience only to realize it didn’t live up to our concept of what we expected. The unfulfilled expectations were caused by an unrealistic concept.

Perhaps the immensity of what retirement signifies is so monumental, that it is too overwhelming for our brains to logically contemplate. Consider, after you have studied to qualify for your specialty for one-third of your life and, were successful at your profession for another third of your life, suddenly everything will stop as you have always known it.

The question arises: “What will I do with the last third of my life?”

The very identity of who you are, in large part, is an ophthalmologist—an active, meaningful, medical professional. You are an experienced and respected doctor taking care of others and living on a schedule that is jammed from morning to night. People all around you depend on you. You are needed and important and up to big things. In fact, you are continually studying and learning about new procedures. If you aren’t a practicing physician any longer, then who will you be? Will how you relate to others and how they relate to you be altered?

Retirement reminds us of a roller-coaster ride that pulls across the finish line and suddenly stops and you climb out. This is some contrast.

In our industry we love numbers so, let’s look at some. There are 10,080 minutes in a week. If you are blessed, you get to sleep for 3,360 of these minutes, hopefully uninterrupted. This will leave us in retirement, 6,720 minutes, or more manageable, 112 hours a week to fill. Conceptually, you think that you may be playing golf (3 x/week for 15 hours), boating (5 hours), walking every day (14 hours), playing bridge (3 hours), seeing the grandkids (10 hours), and traveling (max 2 months). Not counting the vacations, this still leaves 65 hours a week. Remember, the office and surgery keep you busy about 60 hours a week, but this is 65 hours a week you have to fill with no practice to go to.

John J., John S. and Traudy Grande, CFP®’s, are co-editors of the 

In other words, how will you fill all day next Monday? Then Tuesday…

Our point is that rushing into and living just for retirement may not be what a healthy individual would want to rush into if they thought about it carefully. Although we have seen ophthalmologists do it on rare occasions, it isn’t an easy endeavor to retire and then a year later, decide it was a mistake and go back to work again.

We are now hearing that today’s 70 year old is the new 50 year old. If this is so, the concept of retiring at 65 may be out the window.

Goal-based retirement planning is different from longevity planning. Holistic retirement planning takes care of the obvious needs first, that is aiming for financial independence, without which you can do nothing. However, this is incomplete as there exists a gap between the financial side and the emotional side of retiring. True retirement planning includes the physical and emotional, as well as the financial needs of retirement.

From our 25 years of observation, it appears it would be prudent for pre-retirees to think and re-think how they will fill their days.

“I’m bored,” are words we often hear from retired doctors. They actually say things like, “How many times can I play golf?”, “How many luncheons can I go to?”, “How many walks can I take up and down the beach?”, or “I don’t feel like I matter anymore.”

In fact, Joseph F. Coughlin, PhD, founder and director, MIT, AgeLab, interviewed retired CEOs in Florida. Interestingly, most retired corporate CEOs live in Naples, Florida. In these interviews, he said 60 of them reported they were unhappy in retirement.

One of Coughlin’s suggestions is to try two exercises before actually retiring:

First, ask yourself what you now do when you are not working. If you have things to do around the house, as he says we all found out during COVID-19, there are just so many times you can paint the rooms. In six months’ time, most of or all the items on your to-do list will be completed.

Second, he suggests that you go to an Airbnb and stay there for 3 weeks. See how this feels to you. We agree with him when he says it is a mistake to think of retirement as a vacation. It is not. It is life happening with lots of time on your hands.

We had one world-renowned, eye-surgeon client who privately confided to us, “retirement is getting better, I now dream of operating only 1 or 2 nights a week rather than every night.”

We aren’t trying to paint a dismal picture of retirement because we do have many retired ophthalmologists who are having the time of their lives.

We hear comments from them like, “I love having no schedule” or “It’s so great not to have those responsibilities anymore.” Many doctors are out skiing, boating, exercising, driving their RVs, and finally doing many of the things they hadn’t the time for before retirement. Some are making furniture, playing music, or creating art. Some make their investments a hobby for them, others work part-time or teach. Many have second and even third homes that they enjoy. Some have become more physically fit than they have been in 20 years. So, there are these doctors as well.

Our point is to “examine” retirement as realistically as you can. Yes, there is golf, skiing, travel, socializing, exercising, biking, boating, flying, etc. But this still leaves a life to be lived in between.

It would be remiss of us not to spend a paragraph on the financial side of retirement. Guessing is no way to plan for retirement, as hoping or guessing is the very antithesis of planning. After all, even if you choose not to retire early, it would still be reassuring to know that you could.

Our strongest recommendation is to become as solidly grounded as you can in the financial realities regarding your future retirement. You will have enough to deal with in retirement without creating the additional problem of worrying about money. Through comprehensive planning, you can get perfectly clear when you can retire without financial worry and with a high enough probability of never running out of money, while still living the lifestyle you have become accustomed to. It is critical that you discover if you are over- or under-allocated to equities or other risk investments as dictated by your specific circumstances and plan.

Our philosophy that has proven true over the decades is never take on any more risk than is absolutely required to meet your goals. If you achieve your stated objectives with a 50/50 allocation between equities and fixed-income, then why take the risk of a 70/30 allocation. Mathematically, find out if you are saving enough or too much toward retirement. Use a budget sheet to realistically calculate your retirement expenses, both essential and discretionary.

And, our advice: don’t use the antiquated rule-of-thumb that you will only need 60% of your current expenses in retirement. In our observation, this just doesn’t work. Our clients spend the same, if not more in retirement at least for the first 5 to 10 years, than before they retired.

Carefully and meticulously construct a viable plan for retirement. This plan, once developed, is your blueprint for the future. Jointly with a financial professional, monitor it throughout the years, making any adjustments that are necessary to account for changing inflation, politics, economy, health issues, and of course according to Murphy’s Law, the “Black Swan” event that you can almost depend on right at retirement. Imagine retirement in 2000, 2008, or March 2020?

Build a moat around your investments to help insulate and protect against the unforeseen. Put in place a lifetime, guaranteed recurring income stream so that you will continue to receive a monthly paycheck in your new lifelong profession. This cash flow will take pressure off of your portfolios by reducing the percentage of withdrawal. Plan for long-term care using some of the newer approaches and policies.

Our friendship with so many retired ophthalmologists has taught us that one should be more reflective about the realities of retirement before retiring. 

As you can see in this article, there are many facets to retirement and these issues deserve your attention sooner than later. You can even candidly talk with other retirees about their experience, but beware, they may not be totally honest with you. After all, if they are living the conceptual retirement “dream,” how could they possibly complain? And, talk to your spouse or partner if you have one, and see what their optimal retirement looks like.

Retirement, like anything worthwhile in life, takes planning. Being prepared for both the financial and emotional challenges that can await you in retirement will help assure that this last one-third of your life will be spent as the most rewarding. If you spent one-third of your life preparing for your profession, doesn’t it make sense to spend some reflective time and financial planning effort to plan for what should be the best years of your life?

Begin now to think about what the perfect retirement would look like to you. How will you fill your days? Be prepared!

®. They are owners and Principals of Grande Financial Services, Inc., Oakhurst, NJ www.Grandefs.com. The Grandes advise doctors across the country on a diverse range of investment and financial matters. Readers may submit their financial questions to them at john.s.grande@grandefs.com or call 800-722-1258.

Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Grande Financial Services, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. © 2022 Securities offered through Raymond James Financial Services, Inc., member FINRA / SIPC | Legal Disclosures | Privacy, Security & Account Protection | Terms of Use Raymond James financial advisors may only conduct business with residents of the states and/or jurisdictions for which they are properly registered. Therefore, a response to a request for information may be delayed. Please note that not all of the investments and services mentioned are available in every state. Investors outside of the United States are subject to securities and tax regulations within their applicable jurisdictions that are not addressed on this site. Contact your local Raymond James office for information and availability. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Goal-based retirement planning is different from longevity planning.

Planning for a retirement from ophthalmology: Concept vs reality

This unimaginable horror we are living through in 2020 should not be wasted. It is like a kind of tough love therapy that helps us to re-evaluate our lives.

If we had suggested three months ago these scenarios-that the entire world would be shut down, there would be no travel, millions of people would be ill and hundreds of thousands dying, people would be in lockdown in their homes in quarantine, your practices would be closed and the stock markets down to this level, and we would have no idea how long these circumstances would last or how bad they might yet become-you would have thought us insane.
	But this is what happened and continues to happen today.

So, in the face of this nightmare, is it possible to emerge from it with a sense of waking up to a new way of living?
	Actually, a new way of being? I coined an expression once, “He (she) who is happiest wins.”

But perhaps we need to redefine happiness, especially given the new world we live in. Life, as normal for most of us in the past, meant running after and reaching goals, accomplishing, accumulating, doing something to achieve an end result. Let’s face it, many of us were like puppies chasing our own tails.

For most of us our focus was on the objective world. Out there. Make more money, redo the house or get a bigger one, the next relationship, the next vacation. New this, new that. Better this, better that. More this, more that. But now we have been forced to temporarily stop the chasing. Halt the perpetual running after things or people, in order to feel fulfilled and happy.

What can we possibly learn from this pandemic that we can carry forward with us like a mega-lottery prize from having survived this horror? How do we emerge from this, thankful for what we might refer to as “waking up”? Fulfillment is never to be found outside of ourselves. This kind of fulfillment is only a limited happiness that comes and goes with intermittent suffering. This isolation/self-quarantine has forced many of us to slow down in life.

Questions we might ask ourselves in this quieter time could be “What do I want?” or  ”What do I really want in life?”

Then ask yourself, “if I get just what I want, then what does that do for me?”

After delving into this we will find that fulfillment and happiness isn’t to be found outside of ourselves. It is always present inside. And, if we take a minute to notice, we will see that there is a new sense of silence in our sheltered-in life. A silence where the chatter of the mind has been reduced and we can get more in touch with our hearts than living solely in our heads. This may sound trite, but I notice that recently in Zoom meetings with our clients, it is hard for me not to say, “I love you,” before ending the meeting.

I suddenly find a sense of fulfillment in just looking out the window at nature. At the sun colorfully reflecting on the clouds at sunset. Listening to the birds sing. There is a new sense of freedom for me in not being owned by the objective world and its things, my toys and accumulations. I cannot imagine ever walking in a park again without this new silence that represents my truer nature. Being more fully in touch and in tune with every precious moment.

I’m ready to go back into the rat race again when it opens up for business. But I will never be the same person as I was before this happened. There is a stillness now. I’m allowing myself not to think so much, or just let the thoughts slide by without effect. Not always planning the next “happiness” event.

Instead I see myself going into a world I had become accustomed to, but with eyes fully open. It reminds me of a fish that doesn’t know it’s in water until it is taken out. Or perhaps even better, a fish complaining that it is thirsty. There has been this beauty around me the whole time. I won’t hesitate to be honest about my love for those around me. We have seen firsthand and through our friends and clients the tragedy of losing someone from this dreadful virus. Not just senior citizens either. What can we learn?

How can we allow ourselves to go back into our professions and lives again and not use this experience to change us for the better? When we get right down to it, we are not our money, our possessions, our successes, our ambitions, or even our education and experiences.

The question then is: Who are we? What a wonderful opportunity we have in this “time out” world to self-inquire into who we are and what we really want and need. This may not sound like financial advice, but it actually is. I’ve noticed for decades the lack of correlation between a person’s joy in life and the size of their estate. Money never has, nor ever will buy you this joyfulness. When we are owned by our assets and possessions, we are prisoners of the very things we own and worship. You no longer own your things, but they now own you.

Where is the freedom in this? We have desires and go after them to find out that the brief passing happiness of achieving a desire was only to be instantly replaced with yet another desire and, round and round we go.

Now, we need new desires to chase after, so we can once again look for that ever elusive fulfillment. I’ve seen too many people misidentifying themselves with their fortunes. In so doing, in thinking they “are” their money, they run the risk of suffering horribly at the slightest decrease in their net worth. Money is useful. It makes life easier and gives you more options to play in the world. But it is only a store of wealth. Not worth getting sick over.
	
	We have all, since childhood been taught to succeed. Everything we do in life we do to improve ourselves. Attempting to change “what is” into what “should be.” We have these long-held ideas, images and belief systems in place that we mistake for reality or truth. Do this, accomplish this and you will be secure and happy.

Well, here we are in 2020. Wealth is reduced. We have lost our freedom to move around. Our very lives are now at risk. Is it possible to be happy in these circumstances?

I can only share my experience with you. But my answer is a resounding yes! Just to be alive, to be aware and conscious of being in this life is joy. To calm the mind, relax the desires a bit, and go inside to a freedom that needs nothing.

Then, to re-emerge into the outside world after realizing, discovering that possessions and things, fame and notoriety, never could have given you this peace. Bring this calmness back out into the world when it opens up again.

Yes, you will do all the things you did before, but you will be awake to the fact that all fulfillment lies within. Not out somewhere out there. Now you can enjoy everything in life, but from a different perspective. We now know, as other generations have learned in the past, there is really no such thing as security. However, to be able to live life without fear of loss is to live life fully.

This unimaginable horror we are living through in 2020 should not be wasted. It is like a kind of tough love therapy that helps us to reevaluate our lives. It is a time for self-inquire and questioning one’s priorities. It is a once-in-a-lifetime opportunity to get a second chance in life. To smell the roses. To slide down for a moment from your head to your heart. To end needless suffering and replace it with wisdom. To be free!

I am not attempting to tell you how to think or be. I am only sharing my observations of others and myself over the last several decades. I offer my insights only with love.

John J. Grande, CFP, Traudy F. Grande, CFP, and John S. Grande, CFP, are co-editors of the Money Matters column in Ophthalmology Times®. They are owners and principals of Grande Financial Services Inc., Oakhurst, NJ, (

). The Grandes advise doctors across the country on a diverse range of investment and financial matters. Readers may submit their financial questions to them at 

The views depicted in this material are for information purposes only and should not be considered specific advice or recommendations for any individual. All investing involves risk, including the potential for loss. Past performance is not indicative of future results. No investment strategy can ensure a profit or protect against loss in a declining market.

John J. Grande, John S. Grande and Traudy Grande are Registered Representatives offering securities through Cetera Advisor Networks LLC, Member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a registered investment adviser. Summit and Cetera are related and are under separate ownership from any other named entity. Registered Branch: 257 Monmouth Rd, Oakhurst, NJ 07755. Phone: 732/531-4111; toll-free: 800/722-1258. Website: 

What can we learn from COVID-19?

If you are wondering what opportunities may be presenting themselves now for investors please read on.

As educators of innovative financial strategies for High-Net-Worth investors, we would be remiss in not introducing you to what we deem to be a sophisticated instrument for high-net-worth investors, such as ophthalmologists. Structured investments have evolved substantially during the last few decades, with an increase in flexible ways to tailor a portfolio to the unique situation and needs of an investor looking for either income or growth. In this article we will cover briefly, growth structured investments.

Growth-oriented structured investments are typically used to achieve consistent market exposure, with embedded protective features that can provide a degree of risk-management in a portfolio. Other times, and still on the growth side of the portfolio, structured investments can be used to try to capitalize on a specific market outlook (bullish or bearish) or to gain efficient, risk-tailored exposure to strategies that may be difficult to access directly. If you are looking to reduce your overall portfolio volatility, these investments are worthy of your attention and examination. Today, as a result of higher interest rates, higher market volatility, and lower markets, we feel the terms of these investments are now more attractive.

Growth investors considering any structured investment should:

View structured investments as buy-and-hold strategies whose payouts are not guaranteed until maturity.

Understand there is no guaranteed secondary market and that while issuers have historically bought back structured investments, they are under no legal obligation to do so.

Be comfortable with the creditworthiness of the issuer since payments made by structured investments are subject to the credit risk of the issuer.

Below we highlight just a “few” hypothetical strategies so that you can see structured investments in action on the growth side of the portfolio. But first, a high-level description of growth-oriented structured investments:

market participation is the goal, often with some risk mitigation

designed for an investor looking to grow their assets, generally characterized by a single payment at maturity

tied to the return of an underlier, such as an equity index, a basket of indices or a stock

can offer full principal protection, partial protection, or no protection at all

Growth use case #1: international exposure, with a degree of risk management

 An investor seeks the potential growth and diversification that may come with international equity exposure. She is optimistic about emerging markets specifically, and comfortable with equity risk. However, she would appreciate some downside protection should those markets experience a slight to moderate decline.

 A market linked growth note with upside participation tied to a broad emerging market equity index along with barrier 

. An example of this type of note can be visualized in this hypothetical illustration:


• leveraged and uncapped participation in any gains in the underlier at maturity
• return of principal, so long as the underlier has not declined below the barrier at maturity


• the potential for losses that are 1:1 from the underlier’s initial level should the underlier close below the barrier level at maturity; losses could be significant
• the underlier’s return is based on price return only and does not include dividends

Growth use case #2: expressing an investment view

 An investor follows the market closely and feels that over the coming 18 months U.S. equity returns may be more muted, or even slightly negative (she expects single-digit returns, either positive or negative). She wants to remain engaged in the markets, but also somewhat protected if market gains do not continue.

 A market linked growth note that offers exposure to U.S. equities, with the potential for a return regardless of whether market performance is positive or negative and a degree protection against a market decline. An example of this type of note can be visualized in this hypothetical illustration:


• upside participation (up to a cap) in any gains in the underlier
• payment even if the underlier return is negative, as long as negative return is not below the hard buffer level at maturity


• the hard buffer only protects principal against a degree of decline in the underlier; losses could be significant
• the underlier’s return is based on price return only and does not include dividends


Structured investments come in a wide variety with different terms and conditions. There’s one for almost any market outlook or investment goal, giving investors the chance to stay in the market and choose how much protection they need to feel comfortable.

When considering any structured investment, understand the type of protection it offers as well as its pay-out potential by working with a qualified financial professional and carefully reviewing the offering documents before investing.

In summary, there are far too many combinations of investment characteristics, barriers, both hard and 100% guaranteed return of the principal investment, auto-callable features, to be covered in this brief article.

To learn more about how risk-managed and alternative solutions can be used within a diversified portfolio please contact us at 

 or call 1-800-722-1258. We would be happy to spend time with you on the phone or set up a Zoom meeting call to answer all of your questions about a strategy that has proven so valuable to so many of your colleagues.

John J., John S. and Traudy Grande, CFPs, are owners and Principals of Grande Financial Services,Inc., Oakhurst, New Jersey. The Grandes advise doctors across the country on a diverse range of investment and financial matters. Contact them

questions at john.s.grande@grandefs.com or call800-722-1258. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services, Advisors, Inc. Grande Financial Services, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. A structured investment typically has two components – a note and a derivative (often an option). Because of the derivative component of the investment, the investment performance may exhibit low correlation to the performance of the underlying asset or index. There are costs and fees associated with structured investments. A derivative is a financial instrument which derives its value/price from the underlying assets. The underlyer is the collection of securities or a representative index used to create the derivative and as it changes in value the derivative will follow suit. Investors should consider any potential tax consequences of owning and disposing of an investment. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax issues, these matters should be discussed with the appropriate professional.

Financial experts point out that what you don’t know you don’t know can hinder you. 

Are there alternative opportunities in volatile markets?

Of all professionals, the last ones who have to be convinced that long-term care cost is a reality are physicians. Physicians see this every day with their elderly patients. However, almost every family has been touched by the challenges of finding proper care facilities, then having to find ways to pay for them.

Families are caught between the reality of what they can afford and the quality of care they can extend to those they love. This can become a very hard decision to make as well as a very emotional one, something we have witnessed in our business and outside of it. No one should ever have to choose between quality health care and preserving money, especially for those we love or for ourselves. But when we do the numbers in a retirement analysis, adding in an extra $80,000 or $90,000 for 4 to 6 years of long-term care, we find that the probability of running out of money increases substantially.

We have seen firsthand that the old traditional long-term care policies (where you pay annual premiums for life) have not always panned out as planned. In fact, for many years we have been witnessing annual increases in premiums, going as high as 69% in some of these policies in 2022 alone. This in essence forces some individuals to drop their coverage just when they need it the most. Insureds can choose to reduce their benefits to keep premiums the same for a while longer, but this is reminiscent of term insurance in which insureds pay premiums for most of their lives only to be forced to drop the policies because of astronomical premiums that come due at the end of the term period. Again, this forces people to drop policies after all those premium payments just when the likelihood of a death claim becomes more probable.

We hope to inform ophthalmologists of the many exciting options now available in the area of funding long-term care, whether for themselves or their parents. We include parents because we have often seen doctors taking care of their parents. There are strategic ways to prepare for this situation that now offer a return of premium to you in the event the coverage is never used. You maintain the ownership and control of the asset, but at little cost if it is never needed.

Because of the limited space, we will be very general in describing what we feel you need to know but most likely do not know. In addition to using cash, here are 3 other ideas for funding asset-based long-term care policies:

Using individual retirement account (IRA) or 401(k) money to fund an asset-based long-term policy

Rolling over an annuity to a long-term care policy

Doing a 1035 tax-free exchange of a life insurance policy to an asset-based long-term care policy.

For those of you who are thinking “I am self-funded or I will be self-funded,” becoming familiar with these high-bred policies and strategies may alter your current mindset. In our experience, there are ways to funding long-term care that should be explored:

Premiums can never increase (or are needed)

Reimbursement or Indemnity plans available

Values, benefits and deaths benefits can be tied to an equity index

Marriage discounts even if only 1 spouse applies

Guaranteed cash values, return of premium

There is a great benefit to utilizing IRA, simplified employee pension, or 401(k) funds, as this enables the cash value to stay in your account while being leveraged 3 to 4 times in long-term care benefits. In addition, there is an added tax advantage whereby, if used for long-term care, benefits are withdrawn tax free from a normally taxable account.

Another option available allows an individual to use an annuity that has grown and who does not want to withdraw money because of the ordinary income taxes. Now individuals can initiate a tax-deferred exchange to a long-term policy that would also pay out tax free if used for long-term costs, as per the January 1, 2010, long-term care benefits of the Pension Protection Act. And with all these plans, you have the right to get a large part of your premium back if never used. 

There is also a death benefit to heirs if you should die before using the benefits or using up benefits that are less than what you paid in the premium. Benefits are for in-home care and outside facilities, and in many cases can be used to pay family members to care for you at home.

Long-term care coverage is generally available from age 35 to 80 years. Long-term care is a sophisticated and complicated area. It is imperative to evaluate all the carriers available and consider ratings, financial statements, future plans and expectations of the companies, benefit costs at various ages, and so on. Each individual is unique and it is critical to choose the right carrier and product that match that individual’s needs. 

The steps we use for our clients and recommend to anyone looking for a long-term care policy is to first, figure out the strategy as it applies to your individual circumstances, then find the policy that best matches your long-term care goal. The second step is getting a blanket approval from a number of companies prior to applying for a specific policy, so you can ascertain what companies you qualify for be a fit and narrow down the available options.

John J., John S., and Traudy F. Grande, CFPs, are co-editors of the "Money Matters" column in 

. They are owners and principals of Grande Financial Services Inc., Oakhurst, NJ (

). The Grandes advise doctors across the country on a diverse range of investment and financial matters. Readers may submit their financial questions to them at john.s.grande@grandefs.com or call 800/722-1258.

John J. Grande, John S. Grande, and Traudy Grande are Registered Representatives offering securities through Cetera Advisor Networks LLC, Member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a registered investment adviser. Summit and Cetera are related and are under separate ownership from any other named entity. Registered Branch: 257 Monmouth Rd, Oakhurst, NJ 07755. Phone: 800/722-1258. Website: 

No one should ever have to choose between quality health care and preserving money, especially for those we love or for ourselves. 

Long-term care:  What you don’t know can hurt you

There are many sophisticated investment vehicles for high-net-worth investors. These investments can assist in participating in market gains, sometimes with a cap, sometimes with a multiplier, while providing what is referred to as a barrier, or buffer on the downside.

How many “Spartacus” movies have you seen where the warriors are holding a weapon in each hand? None that we can remember. One could suppose that two swords would allow you to slay more of the enemy, but you wouldn’t last long being unprotected.

The same with having two shields and no sword. You could prolong your demise a bit but make no advances without a weapon.

It is like this with investing. There is a war going on in which an investor must prevail over forces like inflation, longevity, retirement expenses, economic downturns, geopolitical upheavals, and systematic and unsystematic risks. As investors, we must be looking for growth, yet protect ourselves, a fine balance like the warrior holding both the sword and the shield.

We could ask the obvious: Why does one invest in the first place? We hold that it is to create a store of wealth from which we can withdraw sometime in the future, when needed, ordinarily for the rest of our lives.

One of the most insidious and stealth of these enemies we are facing is inflation. As an example, when generating a comprehensive retirement analysis for a client, we look for a probability of success of no less than 75%.

Let us look at what happened when we added just 2% to the customary 3.5% that we usually assume, which was the average inflation rate for the last 40 years, to a particular client’s analysis. Increasing the inflation rate to 5.5%, the probability of their success decreased from 85% to 42%.

What we found interesting was that another client with a 99% probability only dropped to a probability of 89% when we made the same change from 3.5% to 5.5%. This seemingly demonstrates that in these cases, the higher store of wealth accumulated insulated better against inflation. This would assume an average 5.5% for the next 30 years, according to these particular plans’ time horizon. The point to be noted is that inflation steals from you, often without you noticing it.*

Some of the other combatants we see in front of us are the unsettling market gyrations, temping those more nervous investors to sell their positions and go to cash or some other safe haven. Then, trying to find the right time to re-enter the markets, most likely after they have risen back up again. This creates a “sell low” and “buy high” strategy which is the opposite of buying low and selling high, which we all strive to do. But fear will do that to you when you don’t have a plan or some hedging strategies in place.

Now, we can add the newest threat to a financially sound retirement—longevity.

This is sort of a mixed bag in that it is a problem, but seemingly a good one, since this means we are living longer.

With the above in mind, what is one to do? How do you remain the aggressor against these worthy adversaries, while protecting your accumulating wealth?

The first part of this answer is to know all the facts regarding your own situation. If you don’t know where you are going, it’s going to be quite difficult to arrive there. This is why we urge doctors to have a comprehensive financial plan created for them. It’s a small effort that will serve you well for the rest of your lives.

There are many variables that will be considered, including but by no way complete: How old are you now? How much have you already accumulated?What are your short-, intermediate and long-term goals? Buying a second home? Children’s education expenses? Retirement age target? Special needs children? Income needs in retirement? Assumed rate of return? Assumed inflation rate? Long-term-care possibilities?

When data is collected and input into a Monte Carlo (regressive analysis) probability study, it will greatly help you to become grounded in the reality of your ideals and goals. With the completion of a plan, questions will be answered concerning: Am I saving enough? How much should I have in equities? When can I retire?

How much can I realistically spend in retirement? How much can I leave to my heirs? Can I own that second or third home? With a plan you will know how much of your invested assets should be allocated to the market, which will hopefully alleviate those knee-jerk reactions of making investment decisions based on fear or greed and getting whipped-sawed.

Now, back to the sword and the shield. Luckily, today there are many sophisticated investment vehicles for high-net-worth investors such as yourselves. These investments can assist you in participating in market gains, sometimes with a cap, sometimes with a multiplier, while providing what is referred to as a barrier, or buffer on the downside.

In other words, there are strategies you can implement to protect part of your portfolio against downside moves. This is like having a sword in one hand and a shield in the other! In addition, there are investment vehicles available that can act much like the old defined benefit plans, providing a lifetime income to fill the gap between income needed at retirement and what a portfolio should generate within prudent guidelines. This additional dependable and recurring income takes pressure off of you and your portfolio.

Generally, this is ideal for fixed expenses in retirement. All of this is meant to work like a symphony in harmony with your total plan.

The structured investments alluded to above are complicated and need to be explained very carefully by a financial professional, as well as you reviewing all relevant disclosures and client materials. But, not knowing about them could be a chink in your armor since we are on the topic of swords and shields. For more information, please feel free to contact us.**


*This case study is for illustrative purposes only. Individual cases will vary. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
Diversification does not guarantee profits or protection against losses.

associated with structured investments, and some risks 

. Common risks include, but are not limited to:

Market-linked notes are senior, unsecured obligations backed by the creditworthiness of the issuing firm. Market-linked CDs are principal protected (when held to maturity) and FDIC insured to applicable limits.

Structured investments are designed to be held to maturity/call date. The investments have limited liquidity with a secondary market that is not guaranteed. Redemptions prior to maturity may result in loss of principal. Secondary market values, typically discounted, appear on client statements during the investment’s term.

Even with protection features, a market-linked note investor can suffer a loss based on investment terms and performance of the underlier. Understanding trade-offs and scenarios where you outperform or underperform the underlier is important when setting performance expectations.

There are strategies you can implement to protect part of your portfolio against downside moves. This is like having a sword in one hand and a shield in the other.

John S. Grande, CFP

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