A Financial Professional Can Help You Avoid Retirement Blind Spots

Are you taking an appropriate amount of risk? Do you have a written retirement plan? Do you have tax strategies in place? Another set of eyes can help as you roll toward retirement.

(Image credit: SIphotography)

One of the great things about being a parent is that you can learn so much from your kids. It gives you a whole new perspective, and there are takeaways you can apply to your own life.

Lately, when I’ve been out riding around town with my teenage daughter, Madison, behind the wheel, I’ve become more aware of all the things that can go wrong even if she’s doing everything right. She could be belted in, going the speed limit, staying in her lane, slowing down at yellow lights and stopping when they’re red — and still, another car could sneak up in her blind spot, cut her off and cause an accident.

When I’m with her, I feel better, of course, because there’s an experienced driver along and a second set of eyes looking out with a different view.

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That’s how individuals should feel when working with a financial professional — like they have a co-pilot watching out for them and shielding them from surprises that might creep up. So, as you continue to cruise toward retirement, talk to a financial professional about the moves that could help you avoid financial blind spots, including:

Maneuvering away from risk in retirement

It sometimes feels as though everybody has forgotten about what happened in 2008, when investors were going along, feeling fine, and then the market plummeted.

Afterward, financial professionals told their clients: “Don’t worry. Stay in it. The market comes back.” And it does … eventually. In my experience, it seems to take the market an average of about six years to get back to where it was.

If you’re getting ready to retire or if you retired recently, an unexpected downturn could damage your life savings — and if you’re pulling income from your portfolio, it could be very difficult to build it back up.

What percentage of your retirement savings are you willing to have exposed to risk? Make sure you and your spouse agree on that amount — and be confident your financial professional’s idea of “conservative” strategies is the same as yours.

Getting a written retirement plan

Sitting down and mapping out the different stages of your financial journey seems like such a simple thing, but most people don’t do it. They have a bunch of money, so they think they’ll be fine, but there’s no plan for how or when they’ll access that money or how to make sure it will last.

Especially in retirement, it’s critical to be aware of the many scenarios that could boost or blow your future goals. Get your plan in writing — and update it regularly.

Protecting against taxes

You’re going to have to pay taxes, but you can be smart about it. Talk to your financial professional about how taxes can affect your financial plan and how to best time distributions, including required minimum distributions.

Don’t assume your tax bracket will go down in retirement. Tax-efficient financial strategies may make the difference between reaching and falling short of your financial goals.

Getting a second opinion

If a second set of eyes can help you avoid blind spots, imagine what a third set of eyes could do. It never hurts to get a fresh point of view on your portfolio’s possibilities. It could be your financial professional was a good fit for you when you were younger and still accumulating wealth but is less prepared to help you in retirement.

The road you know isn’t necessarily the safest or least prone to potholes. This is a great time to get an annual review from someone who is more familiar with the many routes available for you to take.

Kim Franke-Folstad contributed to this report.

Investment advisory services offered through AE Wealth Management, LLC (AEWM). AEWM and Core Financial are not affiliated entities. Investing involves risk including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Philip Gordley, Investment Adviser
President and Founder, Core Financial

Philip Gordley is an independent financial adviser in Albuquerque, N.M. The president and founder of Core Financial, he has more than 35 years of experience in the insurance and investment industry and has a bachelor's degree from Quincy College. Phil has been married for 26 years to his wife, Zora, and they have two teenage daughters.