After a lifetime of earning and saving, one might expect a comfortable and financially secure retirement, especially with a reliable financial advisor – right?
“Life is rarely that simple or black-and-white and, unfortunately, neither is the financial realm,” says Bryan S. Slovon, founder and CEO of Stuart Financial Group in Greenbelt, MD (www.stuartfg.com).
“Perhaps the arithmetic of personal wealth should be much simpler, but like it or not, the rules of economics are riddled with fine print, unexpected or inadequately explained conditions, and loopholes.”
Further complicating matters are various professionals in the financial industry. Whether or not a professional means well, the fact remains that many are actually trying to sell products, he says.
“It’s worth reflecting on where your advisor is coming from,” Slovon says. “If they are not fully independent – as in not working for a large institution – their advice may be biased toward sales.”
Ultimately, each person must be his or her own best financial advocate. It may take a team of professionals in various fields to provide retirees with the good life, but individuals need to be their own most valuable player for their well-being. Slovon reviews basic measures to quarterback your life to financial wellness.
• Listen to your doctor … so to speak. If you want to enjoy your golden years, good health is arguably the most important step – and it’s cost-effective.
“More specifically, doctors often tell patients that they can be of service only in as much as patients are doing their part for good health,” Slovon says. “A healthy diet, exercise, regular doctor’s visits, etc. are necessary. These things help provide good health. A similar kind of vigilance is required if you want to fully enjoy your money in retirement.”
• Audit your current and future expenses; spell out your plan. If you don’t have a plan for your money then you’re just hoping for things to work out. You can do better than that, even though changes in your plan will likely occur at some point. The most basic aspect of a financial plan includes understanding your current budget, which could be compared to expenses expected in the future. The more technical side of things, such as how to save on taxes and make your money go further, would benefit from analysis by a truly independent financial advisor.
• Focus on your taxes, and perhaps tax-favored investments. An important part of understanding your budget, and making it work better for you, is getting reliable professional analysis on your tax situation. You may be paying much more than is necessary. If you are expecting to retire in the near future, you may especially benefit from analysis of your tax budget.
Also, ask about investments that are tax-exempt and tax-deferrable. These include municipal bonds and certain money market funds, which provide a way to grow money that’s exempt from federal taxes.
“Most of us give our lives to our work and families our entire adult lives,” Slovon says. “If you’re nearing or in retirement, it’s time to focus on you. That means you’ll need at least some professional financial help. However, you are the best person to oversee your own economic fate.”