Financial Information

I’m always amused by people who will spend a lot of time and effort becoming educated on topics such as the best type of big screen TV to buy, yet completely ignore their financial education and are surprised if their retirement savings don’t work out as they thought they should.

Sometimes the excuse is that they don’t understand, and they simply rely on their investment advisor to take care of their savings for them. Certainly if you go to Ken Himmler (www.kenhimmler.com) for his services or use Integrated Asset Management (www.iamllc.biz) for your portfolio you have every reason to believe that your money will be put in the best investments.

That shouldn’t mean that you do not take an interest in your money, and study the options that are available – far from it. It is the most critical aspect of your retirement planning and you need to understand what is being talked about when you discuss investment advice.

Everyone is different in terms of their expectations for their money, and how they feel about risk, and generally for the higher returns you need to take a higher risk, which means that your investment is more likely to fluctuate and might not perform as well as you hope.

The best advisors will take time with you and learn what your personal financial goals and risk profile are, so they can suggest a portfolio to suit you. There is no “one size fits all” solution, and your investments should reflect your personality. The best investments for one person may be wrong for another.

Generally you will be advised to have diversified investments, as no-one can guarantee any particular performance. So that you can understand what is involved with each type of fund or security, there are many sources of free investment research which you can check online. For instance, you can look up mutual fund performance on www.morningstar.com. It’s your money, and you owe it to yourself to get a basic investment education so that you can be sure your investments match your aspirations.

Authored by Kenneth Himmler, Sr.

Those approaching retirement age become increasingly interested in how much money will be available for them to live on each year. The obvious fear is that the money may run out if you draw out too much, and you will live the end of your life as a pauper. On the other hand, and apart from wishing to leave a reasonable inheritance for your heirs, there is always the feeling that you want enjoy life in retirement, and that sufficient money is one element to this.

One way in which you can deal with the question of an assured regular income is by purchasing an annuity. You can find annuities to suit your needs, and the payments can increase each year in line with inflation. However, as they are insurance they do not, on average, give as much income as straight retirement planning, with an annual draw down of your resources – mainly because the insurance company has expenses which must come from the investments. Another disadvantage is that you cannot easily vary the amount that you take, if for instance one year you want to make an expensive purchase.

A survey conducted by MetLife last year found that nearly 70% of pre-retirees overestimate how much they can take out of their retirement savings each year, with 43% believing that they can withdraw 10% or more each year without damaging their principal. The only reason that this might be excusable is that 60% also underestimate their life expectancy in retirement. This is clearly a case for some investment advice from a company such as Integrated Asset Management LLC (www.iamllc.biz) or an investment advisor such as Ken Himmler (www.kenhimmler.com).

So how much should you expect to be able to take from your diversified investments? Disappointingly, the experts generally agree that you should only take 4% per year. This is based on the worst investment period of the last 75 years, and assumes that your capital will dwindle away after thirty years.

Authored by Kenneth Himmler, Sr.

It’s no secret that we’re knee-deep in one of the most severe recessions in several decades – and you need important investment advice to see you through the recession, particularly if you’re saving up for retirement.  Since more baby boomers than ever before are freezing contributions to their 401(k) retirement funds or cashing them out altogether, it’s time to dispense some investment advice that will recession-proof your retirement savings – and have you living the retirement plans that you’ve always dreamed of!

Investment firms and advisors are keen to let their golden-aged investors know this key piece of advice: whatever the condition of the recession, do not pull out of the market out of fear.  While every bone in your body might be telling you to pull your money out of your portfolio before you lose your life savings, take note: markets inevitably must go through a cyclical effect.  Sure, it’s tempting to invest during the good times – but what about when a bear market is in full effect?  Any investment advisor will tell you that it’s because many investors don’t have the patience or the stomach to watch as the markets fluctuate based on economic growth and recession.  In fact, a recent study by Dalbar, Inc. found that no matter what an investor’s desired retirement plans or investment timelines, that same investor ended up selling his or her shares within four to six years in the market, simply because they were frightened by a sudden downtown in the market and the economy.

So if you’re looking to recession-proof your retirement savings, it’s important to understand that you shouldn’t pull your money out of the markets simply because it’s doing poorly; rather, a savvy investor will understand that once a market reaches the bottom, it has nowhere to go but up. However, a smart investment advisor will do everything possible to make sure that their clients understand the nature of fluctuating markets: it’s an inevitability that markets will waffle between a bull and bear market. 

Additionally, make sure that you receive an investment education from your registered investment advisor.  He or she will help you to outlast the poorest of markets, so you’ll be able to reap the fruits of a bull market once again!

For more information on smart retirement planning, visit www.kenhimmler.com, the IRA and 401(k) experts!

Authored by Ken Himmler, Sr.