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Your New Retirement Puzzle


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June 07, 2020

Your New Retirement Puzzle

Given all the uncertainty that it seems our country (and the world) is going through right now, that age-old expression that uncertainty is the ONLY thing we can count on is ever-present. People are feeling "the crunch" now for different reasons, and it is causing many to reevaluate their long-term plans because of some short-term decisions they may have to make. As people just begin to consider stepping towards opening businesses and inching towards a new normal, it's a good time for establishing some new habits and feelings about what you should be doing concerning your money.

Here are some things to consider moving forward:

  1. Reexamine Your Lifestyle: After a few months of spending way more time at home than usual, most people found that they were forced to find other ways to enjoy themselves besides their regular activities that drain their wallets. Eating out and shopping are some of the guilty "go to's" here. Hopefully, people will hold on to their future memories of dinner table conversations, board games, and neighborhood walks that helped see them through quarantine and opt to continue doing them.
  2. Volatility Is Real: It's obvious that major events happen that will seem to drop a hand grenade right in the middle of your portfolio. Statistics show that as long as you ride out that wave, you'll be okay on the other side. It's always tempting to sell and dump positions to avoid losses, but since NOBODY can predict where the bottom is, you're better off staying invested. Over 90% of the success of a portfolio is due to its diversification, and not what you bought and when you bought it.
  3. Loans Vs. Distributions: If you are faced with pulling funds out of your 401(k), opt for loans instead of distributions. This will give yourself a break from having to pay the penalty for early withdrawals before age 59 ½. Plus, you'll be able to get the funds back in there and pay yourself a little bit of interest as well.
  4. Reduce Risk With Age: Warren Buffet recommends a 90% stock/10% bond portfolio. But if you're closer to retirement and have had a hard time watching your balances take such a hit from effects of the global pandemic, you should consider seriously adding more fixed income to ease the seesaw swings. Many advisors recommend having "your age" as the percentage of bonds you should have. If you are 45, you should have 45% in bonds.
  5. Protection Strategies: Insurance is definitely the least fun thing to talk about in financial planning. But because bad things happen to good people all the time, protecting your future is an important part of your financial puzzle. Consider taking a portion of your assets and using some type of investment that give you protection against the inevitable market swings that we're certain to experience.

Remember: we know that we will experience economic uncertainty at different times, and nobody will effectively be able to predict when those times will come, but if you remember to commit to some of these principles, getting through them could be better the next time.

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


Knowing Your Grocery Bill

About the author

Jeremiah Thompson wearing a suit

Jeremiah Thompson

Vice President, Private CFO®

Originally from Washington, DC, Jeremiah has previously worked for Ameriprise Financial. For his final two years at Ameriprise, he led his office in production, client acquisition and financial planning.

After graduating from James Madison University in Virginia armed with a degree in Music Business (that's right.. Music Business), Jeremiah spent several years building two organizations that had groups touring up and down the east coast. Those unique experiences of running his own business gave him great insight into what it takes to actually run, market, and grow an organization from the garage to getting on airplanes to go to work.

While not working, Jeremiah loves to spend time being amazed by his wife Renée, young daughters Gianna & Sabina and sweet but crazy family dog, Fender. He's passionate about physical fitness, US Soccer, NFL Football, and music/studio production.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Background and qualification information is available at FINRA's BrokerCheck website.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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