Advertisement
retirement

Do you Have the Right Tools to Navigate Your Retirement?

It takes sound planning to map the best route to your destination, and it’s easy to get tripped up along the way. Here are five of the most common spots where people make mistakes.

Retirement. What does that word mean to you? If you are like most people, it is the end of a journey. But you would be WRONG! Imagine running a marathon and, after 26.2 long and arduous miles, you are told that you have completed ONLY half the race! That is a stark reality that many retirees are discovering after they leave the workplace and begin the longest vacation of their lives. If you have asked yourself, "Have I prepared well enough for retirement?" or "Do I have enough to retire?" then keep reading.

After listening to all the experts regarding retirement, how can you possibly choose the best mix of financial products to provide a sustainable retirement plan? Mutual funds, indexed annuities, stocks, 401(k)s, Social Security, variable annuities and their many variations are discussed in financial meetings and seminars across the country every day. None of these products matter if they are not a part of a well-defined plan specific to you.

Advertisement - Article continues below

Let's say you are planning a cross-country road trip. Your journey will take you from New York to Los Angeles, and you have a set budget. You grab the atlas, pack your bags, gas up the car and head out for your adventure. Now, will you make it to your destination? Maybe. There are so many variables that could affect the success or the failure of your trip.

Advertisement
Advertisement - Article continues below

Each year, we see hundreds of wonderful people getting to ready embark on the winding road of retirement. Yet, they are not typically aware of the many twists and turns that await them. Some of the common mistakes we see with their plans are:

1. Not allowing for the potential of an exceptionally long life.

There is a rather high chance that each of us may need some form of long-term care before we die, and it can affect one’s portfolio. Make sure to check out varying ways of helping insure for this risk.

2. Depending solely on an employer’s market-driven 401(k) plan and Social Security.

Pensions for many of us are a thing of the past. Those of us who still have one are quite lucky, but as we move through our working years it is critical that we set aside money into an IRA, Roth IRA or other savings vehicle to help supplement income in our retirement. In addition, permanent life insurance also can provide a potential income source that can be highly tax-efficient.

3. Using “financial tools” that are not suited for their specific needs and goals.

We see so many folks who own a variety of financial instruments, but they really don’t know why they own what they own or how these financial products may serve them. If you are concerned about a guaranteed income stream you cannot outlive, it is important to consider financial vehicles that can help protect against market volatility. Possibly a fixed-index annuity would serve that goal better. You need to consider financial vehicles to help you work toward your goals.

4. Not knowing exactly what they currently pay in fees and what these fees could potentially cost them over time.

This gets back to really not knowing or understanding what a person owns. Paying too much in fees can dramatically affect your potential returns. Ask a qualified financial professional for a second opinion, and remember: If you are using a firm that is not held to fiduciary standard, they may have their own interests in mind and not yours.

5. Unknowingly taking on too much risk in their portfolios.

It is critical that both you and your possible partner in life go through a simple exercise called risk analysis. This will give your financial professional a feel for your tolerance to overall market risk. Then have your financial professional provide a full analysis of your holdings to see how much risk your current portfolio has. Compare your risk number to that of your existing portfolio, and if they do not match up, then consider seeking a second opinion to help ensure your current strategy aligns with your goals.

Advertisement - Article continues below
Advertisement
Advertisement - Article continues below

A well-thought-out and detailed financial plan is similar to a GPS in your car. It can provide you with the comfort of knowing exactly where you are going, where to turn, possible roadblocks, etc. You would feel more confident driving cross country when you have a tool like that to rely upon along the way. Likewise, having a financial firm that can provide you with a comprehensive plan that is detailed, transparent and, most important, has your best interests in mind is a vital part of allowing you to retire with confidence.

Fiduciary firms are required to always, and in every way, serve only your best interests. You have worked too hard to begin your journey alone and must be aware of all the best possible routes. You deserve to have the self-assurance and comfort knowing that retirement will be exactly what you intended it to be.

Investment advisory services offered through AE Wealth Management, LLC.Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits, guaranteed income, or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

Advertisement

About the Author

Mike 'Cy' Cajthaml Jr.

Vice President, Cy Financial Wealth Management

Mike "Cy" Cajthaml Jr. is an Investment Adviser Representative; a retirement focused financial professional, and the vice president of Cy Financial. He has 10 years' experience in the financial services industry. As a fiduciary, his first priority is ensuring his clients' best interest. Cy Financial is a comprehensive financial planning firm based in Overland Park, Kansas. Cy is also licensed in Illinois, Wisconsin, Missouri, Minnesota, Michigan, Florida, Arizona and Tennessee.

Advertisement

Most Popular

11 Dividend-Paying Stocks You Should Think Twice About
dividend stocks

11 Dividend-Paying Stocks You Should Think Twice About

Dividend-paying stocks often can be a store of safety, but 2020 has been difficult on income equities. These 11 picks look like shaky plays despite th…
September 21, 2020
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
Where You Should Invest Now
investing

Where You Should Invest Now

Kiplinger.com senior investing editor Kyle Woodley joins our Your Money's Worth podcast to answer investor questions about tech stocks, the election a…
September 22, 2020

Recommended

How To Buy a Roth IRA When You Make Too Much To Qualify For One
Roth IRAs

How To Buy a Roth IRA When You Make Too Much To Qualify For One

With their tax-free growth and tax-free withdrawals, Roth IRAs are a great deal — if you qualify. If you don’t, well, there’s still a way to get into …
September 23, 2020
Check Your Financial Adviser Now (and Every Year) or Regret It Later
wealth management

Check Your Financial Adviser Now (and Every Year) or Regret It Later

Fewer than 10% of investors use such free background checks as Investor.gov, BrokerCheck or IAPD to check their financial advisers’ backgrounds. These…
September 21, 2020
The Annuity With a Tax-Planning Twist
Financial Planning

The Annuity With a Tax-Planning Twist

A qualified life annuity contract helps retirees with guaranteed payments to last their entire lives.
September 21, 2020
HSA Limits and Minimums
health savings accounts

HSA Limits and Minimums

Annually adjusted contribution limits and other requirements must be met if you're covering health care costs with a Health Savings Account.
September 21, 2020