Retirement tools for the new year
By Carl Edwards
Wow, what an amazing market ride over the last few years. Running on tracks laid by an unprecedented Federal Reserve monetary easing program, the market has once again run to new all-time highs and appears to still have some steam. Or does it?
While no one really knows the answer to this, it is important to remember history as a guide, and to think about the future — your future. It wasn’t all that long ago that the world’s financial system was shaken to its core, leaving many retirees running for shelter from the Ebola-like symptoms displayed by world financial systems. Fear over which institution or country would next display the almost certain deadly symptoms ran rampant.
I am certainly not echoing the calls of the past and screaming it’s time to get your guns and gold. I am, however, pointing out to consumers the recent and vivid reminders of the importance to get back to the basics with your financial planning this New Year. If we fail to remember the past, we repeat it. You have worked too hard preparing for this time in your life.
Let’s review three vital elements you should implement in your retirement plan this New Year.
• Get your annual financial check-up. How can we possibly forget to do this? Annual check-ups are the No. 1 preventative care tool at our disposal. While many individuals should be meeting more regularly with their financial advisor, everyone should have at least the minimum of an annual visit. Problems creep up and this is often the best way to catch them before it is too late.
• Don’t forget to diversify. Are you working with a broker who always wants to sell you mutual funds full of stocks and bonds? Does your annuity guy think every dime you have should be stuffed into insurance products? The reality is they are probably both wrong. Find an advisor this year who knows the benefits of each of these products, but who also knows the value of how they work together. Diversification is important and it may include each of these products along with other assets such as individual stocks and bonds, certificates of deposit (structured and fixed), business development companies, real estate investment trusts, precious metals, and numerous other investments.
• Rebalance, rebalance, rebalance. With the great equity run up we have encountered since the lows of March 2009, it is vital to remember that we must continue to evaluate our investment portfolios. While equity portfolios have risen significantly since that time, other areas of our portfolio may not have fared so well, leaving our risk levels in need of adjustment. It is often a good idea to capture some of those hard-earned gains. You never know — the next major pullback could be just around the corner. Be prudent, not greedy.
Carl Edwards is a chartered financial consultant and is the owner of C.E. Wealth Group.
You don’t need to pay an advisor. Get a brokerage account at Fidelity or Vanguard and buy total market index funds or index etf’s. Invest less in these funds as you get older and more in cash.
30 years old? Invest 100%
40 years old Invest 80%
50 years old Invest 70%
60 Invest 50%
70 Invest 30%
and so on, the older you get the more conservative you want to be. If you don’t like much volatility, make your cash allocation bigger. It’s not rocket science, anyone can do this without an advisor.
If you work here in So. Lake Tahoe for one of our major employers paying minimum wage or slightly higher, what would you recommend as an investment strategy for those workers?
Mr. Murphy:
Maybe individuals working for minimum wage or slightly higher could consider investing in themselves and develop a greater skillset or expand their education which would also expand their employment opportunities. A lot of people take responsibility for their own lives and work really hard to elevate themselves, but then there will always be some people who blame others and make excuses. In the end it usually comes down to our own choices.
Spouse – 4-mer-usmc
Ms. Spouse:
Perhaps you should make yourself aware of the fact that many people working here in town are actually college graduates that are unable to find jobs in their chosen fields because of 35+ years of reaganomics. We are slowly emerging from the bush crash of the economy but until we eliminate the obstruction of any progress by the “loyal opposition” seditionists, many workers continue just trying to survive.
*snort* Mr. Murphy, perhaps you should make yourself aware that any college graduate unable to find a job in his/her chosen field here in town is foolish to stay. They should be smart enough to know what kind of opportunities exist at Lake Tahoe, and not expect miracles. Long before “Reaganomics” this was a tourist and/or agricultural town, NOT a business or manufacturing or cultural center. Unless you’re in the tourist/entertainment industry, this is not the town for you. Unless, or course, you’re hoping to work your way up in the ever expanding government sector. The only sector that is actually showing growth.
Where would you suggest people should go to find work thanks to obstructionist losers in the House of Reps that have blocked every jobs bill passed in the Senate? It’s not just Tahoe that suffers from teabagger stuoidity, it’s the whole country.
snort this
EOM
‘The only sector that is actually showing growth.’
fact check please.
Life doesn’t owe anybody a wage. If you can’t find work in one location, move to another. It’s what people have done since the beginning of time. At least until government stepped in with welfare to allow people to wallow in place in semi-comfortable poverty forever.
There is a more sophisticated discussion about social safety nets, economic stability and capitalism that no one expects you to be a part of, given your limited comprehension and education.