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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 .