Coming of Age
ecently, while having lunch with a client, we both commiserated about how neither of us had really planned to live to such a ripe old’ age. While growing up we thought that anyone entering the 60s was old, real old. Yet here we both are in our mid sixties and wondering if we could possibly outlive our assets in retirement.
Years ago life was indeed much simpler. You retired at 60 at a nice dinner party, heard plaudits from your co-workers, received your engraved watch and left to meet your fate. Now you might retire at mid 50s due to pressures of a merger, downsizing or increased efficiencies and look out to possibly living into your 90s. This is why retirement planning is so important and especially plans for a surviving spouse. This planning should be done before retirement but too often that is not the case. Your retirement nest egg can grow through capital appreciation of assets, income streams from investments, market timing and trading of equities. However preservation of capital must be on the front burner. Real estate is one option, yet in your later years, it may be hard to afford the luxury of locking in your capital. So many options are hard to compare.
Younger individuals entering the work force have myriad opportunities not available years ago. SIMPLE IRA programs meet the requirements of many single and married working individuals. We also have Roth IRAs, SEP IRAs and 401k Plans. Many workers are involved in one if not several of these options. However these accounts also need planning and must be monitored for many economic variables.
Because many retirement accounts use mutual funds they have come under much scrutiny lately. Many funds were sold to investors on the idea of superior performance. Yet the 5 year performance numbers are less than impressive. Too often we have reviewed different mutual fund portfolios for an individual investor and find basically the same stocks in all the funds; so much for investment diversification. Also there are always fees involved with mutual funds that effect performance, even the so-called ‘no load’ funds have expenses, so buyer beware.
Today’s overwhelming news events prove that individuals should have more control of their individual assets. A better way to save for your eventual retirement is through a “hands on” investment program. Whether it is a young investor or the retiree, one should consider the benefits of an investment advisor. The advisors primary goal is to evaluate each individual account as to both its short term and long term goals. Most investment advisors have years of training, and experience, and they spend many hours analyzing the markets, stocks, sectors, trends and economic indicators.
We at Melhado Flynn realize the need for individual investment advice. Starting November 20th we will be initiating informal discussions on topics of financial interest at our offices pertaining to “outliving your assets”, so please call on us to reserve your place.
By William G. Roe, Senior Vice President
Melhado, Flynn’s Strategic Asset Management Group: William G. Roe, Regional Manager, Allen G. Oechsner, Senior Portfolio Manager, Brian D. Bensch, Portfolio Manager, Mark Generales, Sales Manager, Ruth Hauck, Service Manager
