"We have a wealth of information that is creating a poverty of attention." - John Payne, Duke University
In the age of the 24/7, 365 news cycles, there is certainly just cause for confusion in managing your financial and retirement portfolios. The abundance of information, as well as conflicting bias opinions of many pundits, can create hesitation with even the most educated and prudent investors. In addition, the chaos pertaining to our current global economic climate only further muddies the water for those trying to navigate a prudent path towards retirement.
One of the most satisfying aspects of my work with clients is helping them envision their retirement and lying out various roadmaps on how to get there. The path will not be easy; we expect that there will be plenty of personal and economic roadblocks, but together we will work through them.
To help you "stay the course" during your financial journey, it's important to find a financial advisor who aligns well with your philosophy and approach to investing. In addition to good alignment, you should also evaluate the financial advisor's experience, background, certifications and the reputation of the firm. And, as with any potential long-term relationship, an element of the selection process simply comes down to a gut feeling.
Once the selection process is complete and you've found a good home for your retirement portfolio, take an active role in your portfolio management and regularly connect with your advisor to stay on top of your investments. Besides your regularly-scheduled check-ins, there are triggers that signal that it is time for you to connect with your financial advisor. Changes in your life, such as marriage, having a child, retirement, a new job, death of a family member or an inheritance are key triggers. Triggers can also be driven by external circumstances, such as a major shift in the economic climate.
While we live in a world that often goes for the "sizzle" over the "substance," managing your money is really an area of life that needs to be all about the substance. Oftentimes, a vast array of tools and information becomes overload and can actually hurt people's decision-making process. I often counsel my clients to tune out the noise and stay on a steady path towards their goals. I coach my clients about the realities of risk in a financial portfolio. Often, this is most effectively done by playing out the worst-case scenario in their portfolios. While the returns may be smaller with a more conservative approach, consistency and reliably are a priority for me and my clients.
Another discussion I have with my clients is about being realistic about when you can retire versus when you want to retire. Rather than doubling down and pursuing an overly aggressive investment strategy that could in fact delay retirement even further, it may be a wiser choice to change your retirement target date or increase your ongoing contribution amounts.
The most important part of any structure is the foundation. That is true for retirement planning as well. I encourage you to start with the basics, essentially the "must haves" in building your retirement portfolio. Consider investing in your employer-sponsored retirement plan and contribute at least enough to take advantage of any employer matching contribution. In addition, explore starting a Roth IRA to build tax diversity into your retirement portfolio. And lastly, find a financial advisor who can serve as your own personal retirement coach and help you keep your eyes on the retirement prize.
ING Retirement Coach Jacob Gold is a third generation financial advisor. He is a published author of "Financial Intelligence; Getting Back to Basics after an Economic Meltdown," which was published in August 2009. Gold is a CERTIFIED FINANCIAL PLANNER™ practitioner and FINRA Series 7, 24 and 66 securities registered.
Securities and Investment advisory services offered through ING Financial Partners, Member SIPC. Neither ING Financial Partners nor its representatives offer tax advice.