Retirement planning is no cakewalk. There are many strategies and approaches that can lead to different outcomes and plenty of mistakes that a retiree can make along the way (as detailed in this guide). Not having proper guidance can leave people unprepared for their financial future – something scary for any retiree. We believe working with a trusted financial advisor can help you avoid mistakes and lay plans for the best possible outcomes. It’s all about establishing a long-term plan and sticking to it. One of the most important decisions a retiree will...
Scammers are everywhere, and unfortunately, it is often retirees/older people who are targeted. According to the 2019 Better Business Bureau’s Scam Tracker Annual Risk Report6, people over 65 years old incur a median loss of $350 from scams; the figure drops to $198 for 55-64-year-olds, but the research shows that about one-third of people in the age group are susceptible. Those two age groups also represent the highest median dollar losses from scams. Scamming can range from people claiming to be the IRS and asking for sensitive social security and/ or tax information,...
Bitcoin and other cryptocurrencies have generated headlines of parabolic returns; “get-rich-quick” stories have been common with stocks like GameStop and AMC; high-flying tech IPOs have generated massive investor subscription; SPACs are all the rage on Wall Street. For many investors following the financial news, it can appear that millions are being made everywhere. That can tempt investors to want in. History tells us that getting baited into ‘hot’ asset classes can – and eventually will – catch-up to investors. For one, bubbles can burst frequently and with no notice. The...
The average equity mutual fund investor consistently underperforms the S&P 500 over time, according to research firm DALBAR. And in many cases, the average equity investor underperforms by a lot. According to DALBAR’s research, one of the main reasons investors are underperforming: they tend to get out of the market at ‘bottoms’ and tend to dive into the market at ‘tops.’ It’s easy to see how this tendency can lead to subpar results. The charts below illustrate for investors, it could be a better strate¬gy to simply stay invested long-term, versus trying to get...
Volatility is inevitable and a normal part of equity investing. But the problem is that many investors get rattled by short-term swings, which leads to hasty knee-jerk reactions. Volatility works both ways: people can get baited into a market rally out of fear of missing out or can panic sell during a market sell-off. Either way, changes to a portfolio allocation because of market movements are rarely a good idea. If you change your asset allocation, it should be because your goals and/or long-term outlook change. Market timing decisions often lead to suboptimal...
A well-diversified portfolio is an essential, time-tested strategy for mitigating volatility and smoothing out long-term returns. And yet, many people fail to adequately diversify their investments. In some cases, and as mentioned above, fear of downside volatility makes some people turn to fixed-in¬come securities while avoiding equities altogether. On the other end of the spectrum, some investors see equities as the optimal way to grow wealth, thereby shunning bonds. Another tendency among many investors is ‘falling in love’ with certain financial securities or...
Not Knowing How to Adjust to Life After Retirement
Some retirees are worried about outliving their nest eggs, while others see retirement as a time to get out there and splurge. On one hand, making painful sacrifices to your living standards could mean giving up on the basic comforts in your golden years. On the other, becoming overly extravagant could mean outliving your assets. It’s all about finding the right balance. To avoid succumbing to either of the above-mentioned extremes, it’s important to take time to map out financial truths in your life. Establishing a detailed retirement...
The thought of losing wealth during retirement is scary, especially given that most of us will stop work¬ing. It follows that many people become risk-averse as they near retirement, which is understandable. But it’s not necessarily the best approach. In an extreme case, an investor might choose to shift a significant percentage of their retirement and portfolio into fixed income and cash. Investing in fixed income generally means lower volatility and somewhat more stable returns over time. But at the same time, it can also mean generating relatively low rates of...
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