When I visit my brother-in-law Tim, I take a plane. When Tim visits me, he takes his motorcycle. Every inch of his six-foot-five body is wrapped in leather. His luggage is packed away in saddle bags. In his rugged BMW designed for offroad riding he makes the two-day trek to have dinner with me and my wife. Tim is a cool guy, and on top of that, he’s very smart. He works for an overseas logistics firm and has done well for himself.
That’s why it was so hard to hear him sound so uncertain over dinner a few nights ago. Tim shared with us that he’s 62 and wants to retire soon, but with his 401k going down on what seems like a daily basis, he isn’t sure if he’s going to be able to retire when he wants to. My brother-in-law has a good position in a big company. He’s a smart guy, not a big spender, and yet here he is worried about being able to retire because the markets aren’t cooperating.
Maybe this sounds like your situation. A lot of people want work to be optional. They want to be able to retire, to have freedom, to have options. But people are looking at their 401K statements or their return-on-investment statements, and those numbers just keep going down. Suddenly you’re left wondering, “Am I going to have to go back to work just to stay afloat?”
As a certified financial planning professional for more than 25 years, I can give you one piece of advice if you’re in that situation; what you’re feeling is a screaming red flag that your investment portfolio is not structured correctly. If your retirement fund is structured the way it should be, then you will be prepared for marketed volatility.
Of course, that isn’t the reality for most people right now. A lot of people are scared, they have to be scared of the markets falling. Why? The problem is that almost all in the financial industry are investing your money in a balanced, diversified portfolio. They’re telling you that you should buy and hold investments.
That’s not a terrible strategy if you’re 33 or 43 years old; you still have time for the market to work its way through ups and downs. If you’re retired or nearing retirement, you don’t have time to ride out the market anymore. Investing in a balanced, diversified portfolio is not something I would suggest for retirees.
My brother-in-law, Tim, has an advisor at a big financial firm. When I asked him what his advisor was telling him to do, he responded that the advisor had told him to be patient and wait out the market. I asked him how much of his portfolio his advisor had moved into cash or short-term bonds to brace for the market crashing. There needs to be padding to catch you as the market continues to fall. Tim couldn’t give me a number, which means the number is a giant zero. Tim told me his advisor moved “a little bit, here and there,” but believes strongly in buying and holding investments. I had to look across the table at my brother-in-law, who is smart with his money and cooler than I’ll ever be on his motorcycle and break it to him that his advisor wants that because he’s most concerned with his own salary. Financial advisors get paid every single month based on how much money you’ve let them play with. If you start mobbing some money into cash, your advisor isn’t going to get paid quite as much.
That was a horrifying thing to have to share with my family. Investing should always be about your money and about what’s best for you. It’s hard to realize that the person you’ve entrusted with a huge chunk of your funds doesn’t care about you at all and is only in it for their own gain. Maybe that’s where you are, too. You’re worried that the market’s going to crash, and you won’t be able to retire. You’re worried that your advisor isn’t doing enough to make sure your money is safe.
The good news is, you have an action step that you can take right now to help guide you through retirement regardless of the current market. You owe it to yourself to get a free, personalized Retire Right Report. Right is an acronym that stands for Risk, Income, Growth, Healthcare, and Taxes. These are five areas that I feel strongly should be addressedin retirement planning. When you get your free Retire Right report, it will show you, in a nice clean format, a snapshot of what you’re doing well and what you need to work on. This report will help put you on the right path to retiring right with the goal of confidence through any market.You can get that report by calling Centennial Advisors at 512-886-5850. We’ll get you set up with a Retire Right Report for free.
Retirement isn’t the time to be worried about markets going up and down. It’s a time to enjoy your life. Please give us a call and get started on the path to a secure retirement; we want you to be able to enjoy the retirement you’ve earned.
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