One of the great things about being a parent is that you can learn so much from your kids. It gives you a whole new perspective, and there are takeaways you can apply to your own life.
Lately, when I’ve been out riding around town with my teenage daughter, Madison, behind the wheel, I’ve become more aware of all the things that can go wrong even if she’s doing everything right. She could be belted in, going the speed limit, staying in her lane, slowing down at yellow lights and stopping when they’re red — and still, another car could sneak up in her blind spot, cut her off and cause an accident.
When I’m with her, I feel better, of course, because there’s an experienced driver along and a second set of eyes looking out with a different view.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That’s how individuals should feel when working with a financial professional — like they have a co-pilot watching out for them and shielding them from surprises that might creep up. So, as you continue to cruise toward retirement, talk to a financial professional about the moves that could help you avoid financial blind spots, including:
Maneuvering away from risk in retirement
It sometimes feels as though everybody has forgotten about what happened in 2008, when investors were going along, feeling fine, and then the market plummeted.
Afterward, financial professionals told their clients: “Don’t worry. Stay in it. The market comes back.” And it does … eventually. In my experience, it seems to take the market an average of about six years to get back to where it was.
If you’re getting ready to retire or if you retired recently, an unexpected downturn could damage your life savings — and if you’re pulling income from your portfolio, it could be very difficult to build it back up.
What percentage of your retirement savings are you willing to have exposed to risk? Make sure you and your spouse agree on that amount — and be confident your financial professional’s idea of “conservative” strategies is the same as yours.
Getting a written retirement plan
Sitting down and mapping out the different stages of your financial journey seems like such a simple thing, but most people don’t do it. They have a bunch of money, so they think they’ll be fine, but there’s no plan for how or when they’ll access that money or how to make sure it will last.
Especially in retirement, it’s critical to be aware of the many scenarios that could boost or blow your future goals. Get your plan in writing — and update it regularly.
Protecting against taxes
You’re going to have to pay taxes, but you can be smart about it. Talk to your financial professional about how taxes can affect your financial plan and how to best time distributions, including required minimum distributions.
Don’t assume your tax bracket will go down in retirement. Tax-efficient financial strategies may make the difference between reaching and falling short of your financial goals.
Getting a second opinion
If a second set of eyes can help you avoid blind spots, imagine what a third set of eyes could do. It never hurts to get a fresh point of view on your portfolio’s possibilities. It could be your financial professional was a good fit for you when you were younger and still accumulating wealth but is less prepared to help you in retirement.
The road you know isn’t necessarily the safest or least prone to potholes. This is a great time to get an annual review from someone who is more familiar with the many routes available for you to take.
Kim Franke-Folstad contributed to this report.
Investment advisory services offered through AE Wealth Management, LLC (AEWM). AEWM and Core Financial are not affiliated entities. Investing involves risk including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
-
How Much Money Is Enough to Be Happy? Can You Have Too Much?The relationship between money and happiness is complicated, but the experts agree on these three eye-opening fundamentals.
-
Five Year-End Strategies You Can't Afford to MissInstead of making New Year's resolutions, consider making some money moves that could help save you big bucks on your taxes.
-
Buying an Insurance Policy: Three Ways to Do ItYou can buy an insurance policy through an insurance agent or broker or on the internet. Which way works best for you?
-
10 Ways Your 1031 Exchange Can Go Horribly WrongDon't let your tax-saving strategy become a financial nightmare — discover the hidden pitfalls that could turn your 1031 exchange into a costly disaster.
-
From Entrepreneur to Retiree: Boosting Your Business' ValueWhen business owners contemplate retirement, their first step should be maximizing the value of their biggest asset. Here are a few steps that could help.
-
You've Got a Trust: Now Who Should Be the Successor Trustee?You've set up a trust to protect your assets and your beneficiaries, but you still must choose the right person to execute your wishes. Here's how to do that.
-
Three Ways Fiduciary Financial Planners Put You FirstFiduciary financial advisers are required by law to work in your best interest. Here's how they are key to intentional and efficient financial management.
-
How Long-Term Care Insurance Has Become More FlexibleToday's long-term care insurance offers retirees more appealing options, which can preserve assets and protect the financial stability of a healthier partner.
