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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
-
Fired Up By the Masters and RBC Heritage? See These Homes for Sale By Golf CoursesFive homes for sale near golf courses, for people who can't get enough of the tour.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
Will My Children Inherit Too Much?If you worry about how your children will handle an inheritance, you're not alone. Luckily, you have options — from lifetime gifting to trusts — that can help.
-
Charitable Giving Lessons From Netflix's 'Apple Cider Vinegar'Charity fraud is rife, and a Netflix series provides a timely warning about donating money to a good cause without looking into its background.
-
Four Takeaways From Filing Your Taxes to Boost Your Financial FutureNow that another tax season is in the rearview mirror for most of us, what lessons can you take from what you learned about your finances to plan for the future?
-
What Claims Adjusters Are Thinking vs What They're SayingAfter a natural disaster, few of us are at our best, but here's what to keep in mind when you're interacting with your insurance company's claims adjuster.
-
Looking to Make a Job Change? How to Stand Out Like a ProTo make a strong first impression in interviews or when networking, skip your job title and work history and use an opening gambit that highlights your talents.
-
First 100 Days: Trump's Impact on Your FinancesHere are some opportunities to consider regarding investing, interest rates and tax cuts as the financial landscape shifts under the new administration.
-
What Would Happen if You Put Your Tax Refund in an IRA?Not only could you get a tax break, but the compounding effect over 35 years could turn the average refund into nearly $14,000.
-
Children Can't Afford to Fly the Nest? Here's How to HelpThe high cost of living means more adult children are staying at home. Here are four ways to help financially so they can eventually spread their wings.
