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Financial Planning Tips & News You are invited to my upcoming seminar series - How to Achieve Balance and Make Your Money Work for You In this series of four interactive seminars, learn about your attitude toward money and how it affects your life, relationships, and health. As you explore the hidden meanings behind money and relationships, you will learn how these impact your decision making process. Are you and your partner on the same page financially? If you’re stressed about money, juggling finances or looking for ways to make your money work for you, this course can help you learn to create a more balanced approach. Susan Wolfson, LCSW a local psychotherapist, and I will teach the seminars on four consecutive Mondays, September 8, 15, 22 and 29 from 6:30 to 8 p.m. at the Fairfield Inn, which is located at
Investment History & Hope Much has been said about using diversification and having a long time horizon to improve your investing results. Having a diversified portfolio means that you will be more likely not to experience as severe a drop in your portfolio as someone who is concentrated in a single asset class. For example a portfolio that uses several asset classes, such as US stocks, international stocks, bonds, emerging equities, real estate, natural resources and cash has seen a better average annual return than the S&P 500. The average annual return for 10 years ending in 2007 was 11.5% vs. the S&P 500’s 5.8%. In addition the lowest annual return for the diversified portfolio was .05% vs. -22.1% for the S&P 500. The second part of the story is that there is hope after a decline in the markets. T. Rowe Price published the following to show how long it takes after a fall to get back to the starting value for the S&P 500. If your investments are concentrated it may take a long time to recover.
*Low date for the S&P 500 Stock Index during recession, as defined by the National Bureau of Economic Research (NBER). ** Months needed for the S&P 500 Stock Index to recover to its pre-recession peak from its recession low. However, if you are well diversified and experience fewer, or no, portfolio loss, it will take far less time to recover. The end result is that you will experience better long term returns with less of a roller coaster ride. The downside – your portfolio will not be very exciting to discuss with your friends. Please contact me if you want more information on the diversified portfolio.
To Retire or Un-retire? Ways to Consider the Question Add retirement to the long list of things Baby Boomers are changing their minds about. An April, 2006 study by Zogby International and the MetLife Mature Market Institute found that a significant number of older Americans are revising their ideas about their post-career years. The study found that 78 percent of respondents aged 55-59 are working or looking for work, as are 60 percent of 60-65 year-olds and 37 percent of 66-70 year-olds. Across all three age groups, roughly 15 percent of workers have actually accepted retirement benefits from a previous employer, and then chose to return to work (or are seeking work). Called the “working retired,” these workers represent 11 percent of 55-59 year-olds, 16 percent of 60-65 year-olds and 19 percent of 66-70 year-olds. A decision to return to work isn’t necessarily a negative. It’s not always a sign that older Americans are having trouble making ends meet. Some work simply because they want to change careers for a new challenge. Yet delaying retirement or returning to the workforce from retirement is a decision that should be made after a thorough financial review. According to MetLife, most older employees expect to stop working for pay at the age of 70. The best time to talk about working in retirement is at least five years before you retire. If you’re working with a good advisor, they’ll force you to answer key questions about the retirement you want to have. You might discover that working in retirement is something you want to avoid at all costs, and you’ll have to accelerate your savings and investments to avoid it. Here are some critical points to consider in a working retirement: Making working retirement a variable in your planning: If you’re in your early 50s and reviewing your retirement planning so far, it makes sense to ask yourself under what conditions you’d return to the workplace. Maybe you want to take a year off after you retire from your current job and then you’ll go back into another career. You obviously need to know based on current projections how much money you’re likely to gather from savings and other retirement resources. Then you need to consider how much money you’d be satisfied making in your post-retirement working life and for how many years you’ll earn that income. Check what returning to work will do to your pension: Early retirement transitions can have some adverse effects particularly where pensions are involved. Check this out carefully before making your move. Back to school? You need to plan: Seniors may get early-bird specials at restaurants, but colleges aren’t giving away free tuition. And if you haven’t had to put your own children through school, you’ll be shocked at how much college costs have risen in the past 30-plus years. If you’re investigating post-retirement employers, see if you can qualify for educational benefits to back up any out-of-pocket costs. Also, some colleges do offer discounted tuition or free classes for seniors. Talk to a tax professional before you make a move: Tax issues shouldn’t determine your ambitions and goals, but it’s important to consider the impact work-related income will have on your retirement. Many retirees find that it doesn’t take much postretirement income to tip them into a higher bracket. Look for ways to control the taxes you’ll ultimately pay, including continued participation in qualified plans, and IRAs, and other tax-favored accumulation vehicles. And don’t forget to discuss your Social Security options. Consider insurance issues: If a retiree returning to the workforce is already receiving Medicare or covered by a “Medigap” policy, they may be able to lower their costs or improve their coverage by accepting group coverage as primary underwriter of their medical expenses. Since people over age 55 are generally the greatest users of the healthcare system, coverage issues are particularly important to run by a financial expert. Keep saving: If you return to the workplace, see what you can do to take advantage of your new employer’s 401(k) plan or any other tax-advantaged retirement savings benefit, particularly if an employer matches your contribution. Don’t miss a chance to enhance your retirement savings. Retirement planning is complex. Deciding to work during retirement is a big piece of the picture. Consider your options carefully and get assistance from professionals to assure you are making choices that will improve your future. July 2008 – This column is produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Tom Roberts, MBA, a local member of the FPA. Tom is the Principal of A New Approach Financial Planning located in Sarasota and Lakewood Ranch, FL. Investments Retirement Planning Insurance Planning Estate Planning Education Planning
Tip 62: Eleven Things You Must Do Now To Ensure 24-Carat Golden Years Did you find this tip helpful? There are 133 more of them in Just Give Me the Answer$: Expert Advisors Address Your Most Pressing Financial Questions, by Sheryl Garrett, CFP® with Marie Swift and The Garrett Planning Network. Published by Dearborn Trade Publishing, June 2004. Just click on the link above or the book cover to purchase your copy. National Media Continue to Herald the Benefits of: Hourly, As-Needed Financial Planning and Advice... Press Coverage / Media Interest NPR, March 25, 2008 - Sheryl Garrett, CFP® hit the air waves as one of three featured financial advisors interviewed by NPR's Tom Ashbrook. The topic of discussion was "protecting your investments and how to ride out the current economic storm." Click hereto listen to a recording of the show. FPA This Week, March 3, 2008 - When The Wall Street Journal recently ran an article entitled "12 People Who Are Changing Your Retirement," long time FPA member Sheryl Garrett, CFP®, was recognized for her efforts in spreading the benefits of financial planning. Read more about Sheryl's acclaim in "The Wall Street Journal Recognizes FPA Member." Newsweek, March 3, 2008 - Sheryl Garrett and the Garrett Planning Network are mentioned in the article "Planners Wanted ASAP" as a good choice in either finding a reputable financial planner or becoming part of a financial planner network. MarketWatch, March 1, 2008 - In an article about five mutual funds that would be good options for newlyweds, Sheryl Garrett, CFP®, founder of the Garrett Network, commented on one of the funds in "To have and to hold." Journal of Financial Planning, March 2008 - Read Sheryl Garrett's noteworthy answers when asked ten very interesting questions in "Sheryl Garrett on Why 400,000 Planners Are Needed... And Where They'll Come From." PRWeb, March 2008 - Garrett Network members brainstormed ways taxpayers can put their hard earned money to work. The result is "What to Do with Your Tax Rebate or Other 'Found Money' - Thirteen Smart Ideas" from "Dummies" author Sheryl Garrett and the Garrett Planning Network. Check it out online via the link above, where it is available as both a 5-minute podcast (interview with Sheryl Garrett, who recaps the high points of our collective advice) and an electronic news release. CNN Money, February 25, 2008 - TheGarrett Planning Network is mentioned as a good place to find an advisor when approaching retirement in "Ask The Expert: Is a financial planner trying to swindle my mom?." Los Angeles Times, February 24, 2008 - The Garrett Planning Network is recommended as a reliable source in finding a reputable financial planner in the article "A debt can continue to haunt." MarketWatch, February 22, 2008 - When thinking about newly reopened value funds, Sheryl Garrett, CFP®, founder of the Garrett Planning Network, stated: "These managers I've respected and admired for so many years are looking at the long-term prospects for our economy and stocks to purchase, and they're seeing wonderful opportunities. We may not see an instant payoff, but it is time to put our money to work." Read "Unlocked and loaded" for more advice on investing in these reopened funds. Bloomington Pantagraph, February 21, 2008 - Sheryl Garrett spoke to a group of college students in the Twin Cities as part of a series of speaking engagements as well as promoting her newest book, Personal Finance Workbook For Dummies®. She shared her passion by saying "Financial planning is one of the most powerful and rewarding career paths where someone can do a lot of good for another person in a short time." Read more in "Financial guru spreads the word." Daily Vidette, February 21, 2008 - Sheryl Garrett, founder of Garrett Planning Network, shared her experiences in the corporate world and beyond with students at Illinois State University. She shared her path to entrepreneurialship with financial planning in "Sheryl Garrett discusses financial planning issues with students." Wall Street Journal, February 16, 2008 - In a special report called "12 People Who Are Changing Your Retirement," WSJ writer Kelly Greene profiles Sheryl Garrett, founder of the Garrett Planning Network, saying: "These pioneers are shaping the way Americans will live, work and play later in life" and that "Sheryl Garrett is on a mission to bring financial planning to the masses." Bloomington Pantagraph, February 14, 2008 - Sheryl Garrett, CFP® shared her experiences as a financial planning entrepreneur and gave Illinois State University students tips to establish a solid financial foundation. She also spoke with ISU faculty, staff and annuitants. Read "Author to share message about personal finance." Chicago Tribune, February 10, 2008 - Along with rising health-care costs, workers need to plan for higher risks associated with their care in retirement, writes Janet Kidd Stewart in "Employer cutbacks have retirees facing more health-care costs." Sheryl Garrett, founder of the Garrett Network, was quoted in the article regarding her view on this subject. Orlando Sun Sentinel, January 28, 2008 - The Garrett Planning Network was represented in an article about rolling over your 401(k) into an IRA. USA Today, January 27, 2008 - The Garrett Planning Network was featured as a place to find a good financial advisor in "Turning 62: Research, caution help in handling lump sum." TODAY Show, January 25, 2008 - The Garrett Planning Network was mentioned on the TODAY Show as a wise choice for locating a financial advisor to help you plan your financial future. Read "5 experts reveal money-saving secrets" to learn more. Appleton Post Crescent, January 23, 2008 - In "Markets ride wild wave," Sheryl Garrett, founder of Garrett Planning Network, responded when asked if consumers should cut back on spending: "So many people have overextended themselves. If you're living on the edge when times are good, just what are you going to do when they get bad?" MarketWatch, January 22, 2008 - Sheryl Garrett offered steps to help investors protect themselves and be goal oriented with their investments in "In managing your finances, keep courage under fire." Associated Press, January 21, 2008 - As Americans learn to live within their means, Sheryl Garrett, founder of Garrett Planning Network, contributes advice on being prepared when times get rough in "Consumers Retrench As Economy Weakens." Los Angeles Times, January 20, 2008 - One reader who was "blown away by planners' fees" asked personal finance columnist Liz Pulliam Weston if there were any financial planner services for the ordinary working middle class. Weston responded with the Garrett Planning Network as the recommended resource in "First, build a down payment." MSN Money, January 18, 2008 - "One of the things that everyone needs to do is check their credit report," says Sheryl Garrett, a CERTIFIED FINANCIAL PLANNER™ professional and founder of the Garrett Planning Network. "Most times, couples, especially longtime couples, have had credit in joint names. If you don't have separate credit, you need to establish separate credit. This can affect men just as easily as women." Read more helpful tips to make good financial decisions during a divorce in "Divorce 101: Restoring your finances." USA Today, January 17, 2008 - Sheryl Garrett, a financial planner and founder of the Garrett Planning Network, says that while she's a big fan of retiring debt-free, she doesn't think people should have all their money tied up in their house, with little cash available for unforeseen needs. Read more tips on retirement planning in "Retirement questions answered." USA Today, January 16, 2008 - Sheryl Garrett, CFP® has been featured on USA Today's Web site in an article about the retirement boom. The article contains one quote from Sheryl, but her photo is prominently displayed at the top of the online article along with 6 audio podcasts by Sheryl. Check it out in "Managing your retirement fund can be tricky." USA Today, January 16, 2008 - "Financial planners in the Garrett Planning Network usually offer fee-only, pay-by-the hour advice, and might be a good fit if you are a do-it-yourself investor and want a one-time check-up or regular financial reviews. Financial Planning Association offers planners for investors of all levels of financial sophistication." This was one of the tips in "5 tips to protect your lump sum." Bradenton Herald, January 15, 2008 - Sheryl Garrett, CFP®, founder of the Garrett Planning Network, recommended ways to skimp around the house and put that money into investments in "How to survive spiraling economy: Play a game." InvestmentNews, January 14, 2008 - Sheryl Garrett was quoted in the article, "Financial advisers looking for silver lining in the clouds," to offer a positive outlook on economic downturns. "When people get nervous about the economy and their job, it actually causes them to realize they better get their stuff together. It can be a blessing for them and us," she said. Walton Sun, January 9, 2008 - Sheryl Garrett, founder of the Garrett Planning Network, was interviewed while promoting her book Personal Finance Workbook For Dummies® in "Financial planning expert offers advice." Parade Magazine, January 6, 2008 - "Your biggest single asset is your ability to earn money," says Sheryl Garrett, a financial advisor in Shawnee Mission, Kansas. "In a weaker economy, you want to strengthen your marketability." Read "Feel Secure About Your Money" to see Sheryl's advice on staying job-ready.
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