In this Lowcountry Live segment hosted by Tom Crawford, Jason Noble of Prime Capital Investment Advisors discusses Portfolio Payday, and how it can help you save for retirement. Learn more about this automated savings account that is customized to each investor!
Portfolio Payday™ can be considered as something that can turn the banking system on its head. Normally, when you get your money that comes in from payroll, it goes into your bank account and from there you spend it. And then maybe—just maybe—you put some of your money into your long-term investments.
With Portfolio Payday, your paycheck gets deposited directly into your brokerage account—also known as your cash management account. From your cash management account, money gets transferred automatically into your regular bank account on the 15th and the 30th of each month, and then you spend that money on your bills and as you see fit. Then just live your life!
Within your cash management account, Portfolio Payday also allows you to build up emergency savings. For instance, let’s say that you elect to have six months’ worth of monthly expenses saved for emergency savings. Once you have exceeded that six-month allocation in the emergency account portion of your cash management account, the excess amount goes automatically into your long-term investments to save for retirement.
If you do need funds for unexpected expenses, two months’ worth of the emergency savings portion of the cash management account is tapped, and if you need more than that, investments will be sold to cover what you need so that your emergency savings can be replenished.
In essence, Portfolio Payday is an automated savings account that is customized specifically to every single client that we serve here at PCIA Charleston.
Jason Noble notes that there are a couple of big benefits he’s seen with his clients:
- For younger clients who want a really good cash flow system in place while they focus on their career and just living their life and enjoying it, Jason has seen Portfolio Payday work wonders. Clients have their income coming in on the 15th and the 30th of the month and then they have their savings being invested automatically. For example, Jason works with one client who is 23 years old—his firm’s youngest client. Her goal is to have more money saved for her retirement when she reaches her parents’ age than her parents do. In setting up Portfolio Payday for her, Jason helped her go from saving $500 per month to saving $2,000 per month! That additional amount is going to allow her to propel her retirement savings through the years.
- For those nearing the end of their careers and headed into retirement, Portfolio Payday may offer an even bigger benefit. Jason sees the transition into retirement happening more easily for those with Portfolio Payday because you’ll be used to getting money from your portfolio. Oftentimes for new retirees who quit their jobs, they’ve been reliant for their whole career on W2 income coming in from payroll. All the sudden that stops, they have to figure out how to get money out of their investments to live on, and that can be a real shock to their system. With Portfolio Payday, that system is all set up so there is a seamless transition.
The only thing Jason may change for retirees is lowering the amount automatically transferring on the 15th and 30th, because Social Security will start coming in once a month to cover some expenses. But the emergency savings and all of the other features are still baked in to Portfolio Payday. Emergency savings isn’t only for your working years—life happens and emergencies happen even when you’re retired. Course corrections and adjustments can be made easier with Portfolio Payday set up.
Learn more about Portfolio Payday here: https://pciacharleston.com/portfolio-payday-pcia-charleston/
If you would like help with your custom financial and retirement plan or want to explore setting up Portfolio Payday, contact Jason Noble, CFP®, RICP® and the team at PCIA Charleston at (843) 743-2926 and they can get you started. Jason holds both CERTIFIED FINANCIAL PLANNER™ and Retirement Income Certified Professional® designations.
This article is provided for general information only and is not to be construed as financial or tax advice. It is recommended that you work with your financial advisor, tax professional and/or attorneys when tax planning.
Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd. Suite #150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”).
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