Carl EdwardsFinancial planning for retirement has always been a daunting prospect; the current landscape simply makes your preparation that much more crucial in using your assets well.
Many advisers and clients rely too much on single product lines. This misuse often gives products and the financial industry in general a bad name. Advisers who are restricted in the types of financial products they can offer or understand may not provide the best advice. Independent and credentialed planners, on the other hand, don’t have their hands tied in what they can offer clients and may provide better advice.”
Here are seven essential points that everyone should know regarding retirement planning.
Avoid trying to time the market. Markets often move in cycles and some investors believe that they can boost their investment returns by buying at the bottom and selling at the top. The problem is that investors are terrible at correctly predicting market movements and multiple studies have shown that market timers usually end up with significantly smaller retirement savings than buy-and-hold investors. While it can be stressful to see your portfolio plummet during a market correction, it’s important to stay calm and focus on your long-term strategy.
Use risk-appropriate financial vehicles. Retiring can be a risky business. The days of relying on employer-provided pension plans are largely over and retirees now have to deal with risks including investment, inflation, healthcare, longevity and others. Though the total elimination of risk isn’t possible, we can manage many of them through competent retirement planning and a clear understanding of factors like your goals, time horizon and financial circumstances.