Top
Retirement Mistakes
By: Don Burrows, Jr. Hilltop Securities, Inc. don. Burrows @ hilltopsecurities. com
Are you still chasing last year’ s returns? Focusing on your rate of return can be distracting to your goal of retirement planning. You may be tempted to change your portfolio on the basis of unusually strong one-year returns from last year ' s winners. But remember, they won’ t necessarily be next year ' s top performers. Once you retire, your retirement assets are your income. Unless you acknowledge this basic fact and change your mind-set from a return chaser to an asset accumulator well before you plan to retire, you increase the risk of outliving your assets. Instead, focus on how to turn your retirement assets into income. You need to decide how much you plan on taking as income.
If you are in your 40s, 50s, or 60s you need to gradually shift your focus from asset accumulation to creating a retirement income. A flow of sustainable income to cover your living expenses is essential for lowering the possibility of outliving your assets. You need to begin thinking about your debt, what your expenses are( or may be in the future), like helping to fund grandchildren’ s education, taking care of elderly parents, outstanding loans or credit card liabilities. Retirement planning is unlike any other type of financial planning because it must adapt to change. It needs to include strategies for dealing with income tax, conversion of assets into income, income gaps, Social Security, Medicare, long-term care, retirement housing options, insurance, debt, retirement plan distribution options, the aging process, estate planning, and many other issues.
We believe you should be examining your financial plan to decide“ when” you will need income and“ how much” you will need when you retire. You also should determine how much of a legacy you want to leave. You need to build your investment portfolio to meet all of these goals, instead of trying to outperform a specific industry or beat last year’ s returns. If you are currently working with a financial advisor, it is our opinion that he or she should not be telling you that your investments will return 7 %, 8 % or whatever the figure is you may be aiming for. You, just like everyone, have different life planning goals, and that is what should be taken into consideration for retirement planning, not a random percentage. You just want to take the appropriate amount of risk to meet your retirement goals.
We suggest to our clients that they take the appropriate amount of investment risk in order for them to create the amount of income they need throughout retirement. If that retirement goal can be achieved with a very small portion of stocks and a bigger focus on bonds, we will recommend that allocation. We don’ t recommend taking additional risk by trying to chase a specific return if we are able to help them without it. We are confident our clients will sleep better at night understanding that a large correction in the stock market may not adversely affect their retirement goals.
Retirement income planning requires continuing training as well as experience in both financial and nonfinancial matters. We recommend that you work with a trusted and experienced financial advisory team who will ask what are your goals your fears, your needs, and then manage a portfolio around those things. Managing your assets should not be based purely on performance. Your team will discuss the challenges of focusing on investment returns instead of on turning retirement assets into income, and then help you make the best choices for your retirement goals.
This article was written and prepared by the Burrows Auttonberry & Agol Investment Group and S. LeBlanc & Company( 760. 929.134); email: sydney @ financialwriter360. com.
The Burrows Auttonberry & Agol Investment Group, which is a marketing name for a group of registered representatives within Hilltop Securities Inc., a member of NYSE, FINRA, and SIPC and a registered broker dealer and registered investment adviser that does not provide tax or legal advice, with headquarters at 1201 Elm Street, Suite 3500, Dallas, TX 75270, 214.859.1800. Though information provided in this article was prepared by sources believed reliable, Hilltop Securities Inc. does not guarantee its accuracy or its completeness. This article is a paid advertisement for the Burrows Auttonberry & Agol Investment Group of Hilltop Securities Inc., and may not be duplicated or redistributed without the prior consent of Hilltop Securities Inc. S. LeBlanc & Company is not affiliated with Hilltop Securities Inc.