Bring the best of 3 financial worlds to your retirement

If the past few years have taught us anything, it’s that financial markets are unlike anything we’ve experienced in our lifetimes. Of course, most investors realize that markets go through ups and downs, good times and bad, and periods of volatility. However, with uncertainty like we’ve never seen before, it’s more important than ever for those near or in retirement to aim for a plan that includes not only diversified investments, but more importantly, a mix of diverse types of financial tools, each with its own specific purpose.

By striving to strategically integrate the worlds of Wall Street, insurance and banking into your plan, you may be preparing for a retirement designed to withstand the challenges of the market today AND in the future. coming.

The mistake I find a lot of people make when it comes to managing their wealth at this stage of life is that they only see “diversification” through the prism of their investments, whereas in fact, they should think about proper diversification in terms of their overall investment. heritage and all the financial tools at their disposal.

Traditionally, the worlds of Wall Street, insurance, and banking have competed for your dollars by operating in silos and even pointing out the downsides of using financial tools outside “their space.” However, trying to find the best in these three worlds and using a variety of financial tools from each can be the key to a financially successful retirement.

Let’s take a look at these three financial worlds and a few ways each could be incorporated when designing your financial plan:

1.Wall Street

Investments will most likely continue to be used for a large portion of your wealth throughout retirement, even though financial markets have at times suffered losses in excess of 20% this year (according to Morningstar data, the S&P ended the second quarter down 20.6%). Some of the main goals of continuing to invest, even moderately/conservatively, in the markets would be to keep up with (or beat) inflation, protect against longevity, and potentially increase additional wealth to be left as a legacy.

No one wants to see the loss of purchasing power during their golden years, and over long periods of time and despite various periods of high volatility, investing in the market has served its purpose, even in retirement.

2. Insurance and annuities

Cash value life insurance and various types of annuities can play an extremely important role in a well-designed plan. The challenge for many people is understanding how best to use each of these tools, while navigating through the hundreds of options available on the market.

For example, many people would never guess that they could get life insurance after age 60, and so would give up using this tool. However, life insurance with cash value could be the “Swiss knifeof retirement because it can have several purposes. In addition to providing tax-free benefits to beneficiaries on the death of the insured, other lesser-known features could include accelerating the death benefit to pay for long-term care and even using cash value. accumulated in the policy for non-taxable distributions. if it is properly structured.

Annuities, which are also insurance products, can also play a very important role in retirement if they are used for the right reasons. The two main purposes I would suggest someone use an annuity for would be:

  1. Principal Preservation …even in down markets, many annuities will not see a loss in value.
  2. Lifetime income…they can bridge the gap between your monthly income needs and what your Social Security and pensions provide. This could help you avoid taking regular distributions from your investment accounts.

When using any type of insurance product in your lineup, I suggest consulting with a trustee to review the best options and explain the pros and cons of these tools.

3. Banking

Having money on hand for a number of purposes is more important than ever. This could include money for dozens of unexpected expenses, home repairs, or even major purchases you plan to make in the next 12 months. The amount of cash a person should have on hand is specific to their future needs. However, having at least six to eight months to cover known fixed expenses is normally a minimum to feel comfortable with.

The list of cash needs is endless, but it is something that should not be overlooked. Whether it’s just putting money aside in a basic money market account or setting up a home equity line of credit to use when needed, make cash on hand an important part of your overall plan.

It may not be the “sexy” part of retirement planning, but if done right, it could help you avoid having to take distributions from your investment accounts during downturns. markets.

The worlds of Wall Street, insurance and banking may not always seem to “play well” together as they often compete for the same dollars. However, crafting a retirement plan that includes the best of the three could provide a built foundation to make your golden years amazing.

Investment advisory services offered by Trek Financial LLC, (Trek) an SEC-registered investment adviser. The information presented is for educational purposes only. It should not be considered specific investment advice, does not take into account your specific circumstances and is not intended to make an offer or solicitation for the sale or purchase of securities or investment strategies. investment. Investments involve risk and are not guaranteed, and past performance is not indicative of future results. For specific tax advice on any strategy, consult a qualified tax practitioner before implementing any strategy described herein. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Financial products and services, if recommended, may include investment advisory fees, commissions and/or other fees. Hike 325

Certified Financial Planner and Retirement Planning Specialist, Empowered Financial Management

Nicholas Toman, CFP®, is a Senior Retirement Planner and Investment Advisor at Empowered Financial Management, a firm specializing in retirement planning for people within five to seven years of retirement or who have recently retired and no longer wish to be theirs. Financial Advisor. Nicholas graduated from the University of Wisconsin-Whitewater with a BBA in Accounting and has been a Certified Financial Planner since 2014.

Investment advisory services offered by Trek Financial, LLC, (Trek), an SEC-registered investment adviser. The information presented is for educational purposes only. It should not be considered specific investment advice, does not take into account your specific circumstances and is not intended to make an offer or solicitation for the sale or purchase of securities or investment strategies. investment. Investments involve risk and are not guaranteed, and past performance is not indicative of future results. For specific tax advice on any strategy, consult a qualified tax practitioner before implementing any strategy described herein. Course 21-115.

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