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Retirement Planning – Preparing for ‘Guaranteed Income in Life’

Monday, October 4th, 2010

In the thick of the stock-market catastrophe in November 2008, Craig Smith, a new retiree at 58, was seized with dread and anxiousness. He wasn’t aware of retirement funds, he was too young to collect Social Security benefits, and he was banking wholly on his savings.

In his mind, he was aware that he couldn’t cash out his stocks because he might live another 30 years or so and would want higher investment returns that would come in from stocks, but emotionally, he was completely scarred.

As retired folks watched their account balances drop sharply, most of them were counseled to cut down their retractions or head back to work to maintain their steady income. The thought of turning into a Wal-Mart welcomer or McDonald’s counter person was certainly not appealing to Craig as he found impossible to sleep at night.

Probabilities are alright — till you become a data point. The recent global recession that gripped the world in fear and horror was so serious and so uncommon (since nearly every asset class, save treasury bonds, endured grievous losses) that it has challenged the accuracy, integrity, and propriety of every conservative strategy.

The biggest source of danger to retirement income lies in removing too much money from a shriveling nest egg, for there may not be adequate left to gain from the unavoidable market backlash. Making the most of all the financial assistance you have at the moment and setting a plan in place that will take care of unforeseen outcomes into consideration is the most crucial and primary step in insuring against them.

Over the next few days we will touch topics such as how to map your time and how you can look out for while looking for a Fulfilling Retirement.

Must-Haves for a Financial Planner

Wednesday, April 14th, 2010

With the ongoing recession, people all over America are steering towards finding recluse in financial planners who guarantee financial stability. Most, however, fail to grasp the importance of ensuring the planner suited for their requirements.

More often than naught, one will find cheeky sales men masked as experienced financial planners trying to palm off the first policy they get. One needs to ensure that a financial planner is more than just a sales person. The following points should be kept in mind while hiring a financial planner.

1. Check whether he / she is qualified: before signing any contract with a financial advisor check whether they are registered or have the required certificates. One may check online to see if they are registered with the Certified Financial Planner mark, the Chartered Financial Consultant or the Personal Financial Specialist labels. These are the only people whose advice one should consider. Even with these designations, some people may not have enough experience to handle the portfolio.
2. Honest financial planners are extremely serious about their work. Most sellers today, are out to sell investments. Instead of being concerned with creating the perfect plan for you, they are concerned with what they will earn out of it. Try to find a genuine person, who is dependable.
3. The planner should freely tell you how he or she is earning revenue. If you feel you need to ask directly – you may phrase it by saying you’d like to see a copy of his/her ADV form. This form needs to have been filled with the Securities and Exchange Commission and will give one a brief idea of the earnings structure of the agent.
4. One must check that the planner looks at the bigger picture of financial planning and not just the budget or earnings – but they must get a clear and apt picture of your current monetary condition.
5. Lastly, regardless of which products they are selling, if they have the relevant experience they should have an idea of all the products available in the market, and not just the ones they are selling. This would be great to help anyone understand what suits individual portfolios best, what are the requirements at the end of the term, and thus only if he or she is able to look at the broader picture- will this be possible.

There are smaller things that play pivotal roles in choosing a planner such as overall experience, integrity, what they are planning for themselves – their portfolios etc, however most of these are personal questions most people feel difficult to address. Do however keep in mind the above points- without those you are not fairly equipped to entrust yours or your family’s finances with another person.