Getting By With a Little Help From Your Friends


If you’re serious about saving for retirement, then you’ve probably done a lot of research and reading about the strategies you can use to do it, the tools the use, and things to look out for. Over time, that knowledge can really build up and it can be tough not to want to share it with family and friends. Guess what? There’s nothing wrong with that. After all, knowledge is power. That means the more you–and in this case, others–know the better you can be when it comes to making financial and retirement decisions. Now, before I go any further, I want to caution to you to be careful when it comes to giving advice regarding taxes or particular investments. Furthermore, if you find that you’re gathering a large following or are taking payment in return for financial advice, you should be very careful and maybe should consider becoming a financial advisor or wealth manager so as to protect yourself and get the credentials needed. In regards to taxes or tax-based strategies, you can potentially open yourself up to some legal liability, particularly if you are not properly credentialed to do so and if things go south (in other words…don’t mess with people’s taxes or tell them what to do with their taxes if you’re not a CPA). Anyways, in regards to sharing your knowledge, maybe you’ve learned some really great tips from an financial advisor or maybe you really like crunching numbers and want to help others who aren’t so skilled. Don’t be afraid to share your knowledge and skills to help others obtain a better grasp of their finances and retirement savings. Even if it’s just a matter of helping a friend set up a spreadsheet to track their expenses or helping a family member research an investment opportunity, you can share what you know and help others. Of course, if you aren’t comfortable with helping others with financial planning or preparing for retirement, you could also always just pass on the name of a reputable wealth manager or financial advisor.

Protect Yourself and Your Savings From Bad Info

Retirement plans and the tax laws that govern them can be intricate and complex. Furthermore, the recently passed SECURE legislation has forced many wealth managers, financial advisors, and tax experts to relearn how some retirement plans work and the best strategies to deal with the changes. It’s no surprise then, with all that, even professionals can occasionally get confused and give incorrect advice. While we work tirelessly to ensure that we are knowledgeable of all the retirement account-related laws and regulations that impact our industry and the people we serve, we aren’t completely infallible. Sometimes we have clients come to use with incredibly unique questions or situations that don’t always lend themselves to straightforward or simple answers. I’m not saying that I have or haven’t made a mistake or two with clients. What I am encouraging you to do, though, is to take some time to research your retirement situation, plans, and questions before reaching out to a professional. Not only does such research make you seem more knowledgeable to the professionals when you talk to them, it can also give you an idea as to what the correct answer might sound like. I also encourage you to do some research on the wealth managers and financial advisors you choose to work with. You can start off by seeing what local review sites say (i.e. Yelp, etc.) and by talking to friends for suggestions. You can also check local Better Business Bureau sites for ratings and any complaints. Finally, don’t be afraid to set up meetings with wealth managers or financial advisors to meet and talk with them about their practices before deciding to work with them. I encourage everyone to find the wealth manager or advisor that they are most comfortable with and confident in.

Sometimes Finance Is More Than Just Numbers

As you are probably well aware, not everyone understands finances. Some people just have a natural ability to understand the intricacies and formulas involved in finance and economics (chances are they’re probably good at math overall). The formulas out there regarding how much you should withdrawal for retirement alone can be downright tricky and confusing, especially for those without a financial planning background. However, just keep in mind that just because you understand how the numbers work doesn’t mean you will automatically be able to make them work for yourself. There are many Americans that don’t have the ability to get ahead with their finances for one reason or another. They may understand what they need to do for a comfortable retirement but don’t have the financial resources needed to get there. That could be because of an personal events beyond their control (i.e. a seriously ill child) or they may not have a job that provides enough income (i.e. they don’t have the proper education needed to advance). Whatever the reason, these people are unable to put their money towards their financial well-being or don’t have the money to put towards it at all. This is important to remember when watching the financial shows on television or reading articles that talk about people who “did it right” while planning their financial future. The financial industry tends to shame those who can’t save enough or who don’t have a large enough nest egg, but that isn’t fair. There may be legitimate reasons why some people can’t get ahead. This is also a good time to mention the importance of setting a good financial example for younger generations, such as our own children. Teaching children how to be responsible with their money at a young age can build a strong foundation that they can carry over into adulthood when they begin to make their own financial decisions. Sound financial decisions early on can set our younger generations up to be in a position to avoid altogether–or at least lessen the possibility–the chance that they do not find financial comfort or success. If you need help with your finances or what advice on how to bolster them for the future, you should speak with a certified financial planner.

Saving for Retirement on Your Own? Beware the Risks

Many people take a do-it-yourself approach to retirement saving. For various reasons–usually because they feel that they can’t afford a financial advisor–they feel that they can do the retirement saving thing alone. Given the amount of free financial education resources found on the Internet as well as the growing number of companies that offering financial planning resources as part of benefits packages, it’s no surprise that some people feel they can do it alone. However, there are risks to going it alone in retirement planning and saving. One area that many one can run into with a DIY retirement is risk itself. If you aren’t taking steps to manage your risk–such as rebalancing your portfolio or diversifying your investments–then you could be opening yourself to trouble. While you may be thinking about risk when you first balance your retirement portfolio, many people neglect to go back and rebalance it from time to time. Yes, the investments may remain the same, but the risks they carry over time may vary. For example, if you first set your portfolio as 50% stocks and 50% bonds, you may not realize that over a period of time (say, 10 years), that the 50% your originally invested in stocks may actually be worth more than that original 50% you invested in bonds. That larger amount of money in stocks will most likely put you at risk of losing a lot should the stock market tumble. That’s why it’s important that you rebalance your retirement portfolio from time to time to protect yourself and keep up with your appetite for risk. It can be easy to set it and forget it when it comes to your portfolio. This is why it’s a big advantage to have a financial advisor involved in your retirement saving as they know the importance of such rebalancing and understand your appetite for risk.


Do You Have an Investment Strategy?

There is no sure-fire, one size fits all investment strategy out there. As you’ve probably found out from talking to friends or watching the market experts, there are a lot of different ways to go about investing and everyone seems to do it in their own unique way. What’s important is not just that you make your investments work for you, but that you invest in a manner that will help you achieve your future goals and plans. The best way to ensure you do that is by having an investment strategy. An investment strategy can help you to decide what types of stocks–or companies–you want to invest in, how much you want to invest in particular areas, and your appetite for risk. Such a strategy can also guarantee that your portfolio remains diversified and therefore more likely to withstand market gyrations. A well thought out investment strategy should be able to provide you with the guidance to meet your goals and plans, whether they be for retirement or just future financial stability. An investment strategy should be tailor-made to your specifications and desires. Therefore, when devising an investment strategy, it’s important that you do so with an investment professional or financial advisor that you are comfortable with and who you feel really understands what you are looking for. If you aren’t comfortable with a particular advisor, don’t be afraid to seek out others until you find the right one.

Keeping Emotions Out of Retirement Planning

If you are planning on investing or saving for retirement on your own–without with the help of an advisor–you may want to be careful of emotions. Dealing with investments, especially the stock market, can be an emotional venture. Too often, individuals let emotions drive their decisions to buy and sell investments, which many times leads to poor decision-making. If you intend to use the markets to fund your retirement plans, you need to know when to sell or ride-out a stock or investment. Emotions can cloud our judgments when it comes to that, which in turn prevents you from making as much money as possible from your investment. Using an advisor to help you make your decisions can take the emotion out of the process and provide feedback and expertise to help you make better choices with your money.