What Tech Employees NEED from Financial Advisors

I recently surveyed tech employees to find out how financial advisors can better address their biggest concerns. Here’s what they had to say.

Make me believe that my company is a unicorn, but help me save as if it isn’t.
Even with the tech boom, only 15 to 20 new companies per year will eventually reach the mark of $100 million in revenue. The good news for Silicon Slopes companies is that the majority of those companies are coming from outside the San Francisco area.i The new 2017 list shows that Utah is home to 4 Unicorns: DOMO, Qualtrics, Pluralsight, and InsideSales.com.ii

Are you working for a unicorn? Many tech employees sink all of their excess cash into stock options. This can create a huge windfall or a major money pit. Britt Hawley from InsideSales.com says that tech employees need financial advisors to, “help them understand, manage, and factor (stock options) into their financial planning.” A good financial advisor can help you create a holistic plan that still optimizes your stock option purchases while giving you some balance through your 401k, insurance planning, and other investment planning. Dan Preece from HealthEquity found this to be true when the company he works for went through an IPO; “One of the biggest things for me was having help navigating through stock options, IPOs.”

Part of a holistic plan is creating a way for you to reach your goals even if your company doesn’t get bought out or go public. There is a lot of value in diversification and multiple income streams. You should still be contributing 10-15% of your salary into your 401(k). If your 401(k) ends up being the smallest piece, then it is still icing on the cake. If your 401(k) is your main retirement, then you will be grateful you chose to save. You don’t want to have to delay retirement because you are still hoping that your company will go public.

Help me without taking all of my money
Too many times tech employees seek out good advice only to find a sales person, masquerading as a financial advisor, pushing the “hottest thing since sliced bread.” Kayden Holt from Pluralsight put it this way, “Employees need people to help them without taking all of their money.” Unfortunately there are a few rotten “advisors” that taint the whole bunch. Be wary if an investment planner is only playing on a one string guitar or sells you something that is too good to be true.

Seek out a holistic advisor, typically a Certified Financial Planner®, that will look at all of your goals and will devise a plan to help you get there. Also make sure the fees they charge are in line with the service provided and that they can prove the value they are providing. Tech employees “like to know in a tangible way how they are benefitting from a financial advisor,” stated Mr. Hawley. Good advice does not have to be expensive, but bad advice always costs you dearly, no matter how little you pay for it.iii

Educate me about how to invest.
Tech employees are more savvy than most. “They like to understand the why” behind an advisors investment actions, said Mr. Hawley. Good investment advisors will be able to explain the details of their investing process with its pros and cons. They can explain in concrete ways what they can do for you that you can’t do for yourself. If you want to do your own investing, they can help you do it. If you want to have someone else manage your money, they can do that too. Most importantly they will be a teacher. “Just as much as we needed grade school to learn how to read and write,” said Mr. Holt, “we need financial advice to learn, grow, and earn.”

Give me different ways to access advice.
The world of advice is changing. The old stockbroker model of paying commissions for stock trades is dying. In its place you can find different models: Do it yourself, monthly retainer, or assets managed for a fee.

Technology is changing the landscape and making better advice and trading platforms available to the masses. Many do-it-yourselfers are drinking in the information and trading their own account.

Paying a monthly retainer, like $100 a month, is a newer model. It allows you to call up and ask questions anytime you want. It also helps people start out on the right foot even if they don’t have a lot of investable assets. It begs to reason that if you are willing to invest $100 in a phone every month, you should be willing to invest $100 in your financial security.

If you don’t enjoy researching investment ideas, you don’t have the time, or you’re afraid of not knowing what you don’t know, then seek out a holistic fee based firm that will also give you advice as part of that fee. The fee based model makes sure the advisor’s interests are aligned with yours.

Shield me from taxes
Tech employees tend to excel and have some great financial rewards. You may also be working for a unicorn and end up with a windfall. In either case you are probably getting killed by taxes, figuratively of course. Mr. Preece stated that reducing tax liability is extremely important because “I’ve worked hard to earn what I’ve got (often putting in late hours) and I want to ensure that I can enjoy as much of what I’ve earned as I can.” The best financial advisors will work in concert with CPAs specializing in stock transactions to make sure you can shield yourself from as much tax as legally possible.

Tech employees have some unique needs. The right financial advisor can help address those needs and make sure your future is all that you expect it to be. As Mr. Holt said, an “advisor is one of the only ways to balance your money and invest in yourself.”


i https://www.strictlyvc.com/2014/12/01/many-tech-companies-break-year/
ii https://www.cbinsights.com/research-unicorn-companies
iii http://www.cbsnews.com/news/quest-for-alpha-the-final-10-rules-for-being-a-successful-investor/

Forge a New & Powerful Financial Paradigm

Dear Friends and Financial Partners!

How can you improve your savings and investing before and during your retirement? Here are some nifty (some might say awesome) tips to immediately change your personal money paradigm.

Change Your Money Mind-set: Chris Reining, who lives in Madison, Wisconsin, became a millionaire at age 35 by doing one thing differently. Chris started working to save and invest, rather than working to spend. By going through a self-imposed paradigm shift, your life can also transform from a working-to-spend environment to a savings-and-investing world. The outcome speaks for itself. This is one powerful idea.

Get Professional Financial Help: Ours, of course. When you are accumulating assets in your 401(k) or 403(b), you are in an automatic investment mode. If you don’t know what the sequence-of-returns risk is or how dollar-cost averaging works against you during your withdrawal years, you are already behind and need our help. Social Security has over 2,700 rules and hundreds of exceptions to these rules. Medicare is filled with land mines. Distributing assets during the decumulation phase is exponentially more complex than adding assets.

Take Charge of Your Emotions: Don’t let your emotions take charge and dictate your actions. Specifically, when the stock market is dropping or has dropped, don’t lock in your losses! Remember: Stock market drops are temporary. Locking in losses is permanent. Locking in losses by selling at or near the bottom of a market may be a mistake you and your loved ones will pay for the rest of your lives.

Ignore the Media: Call us. We know your specific financial goals. We manage money and segment your accounts by time to avoid the sequence-of-returns risk. Even when the media is all doom and gloom, there’s a good chance your accounts will be doing just fine with respect to your own financial goals. “The Sky is Falling” mentality illustrated by Henny Penny, more commonly known in the U.S. as Chicken Little, may cause you to want to lock in your losses. Don’t do it. Even well-meaning friends and family members can push you away from financial goals.

Remember: Contrary to many, investing is not about beating the market. Financial planning and investment management are about meeting your goals, including having a sustainable income stream during retirement. At Smedley we strive to help you forge a powerful, yet personal financial paradigm. As always, we are on your side.

Bullish Best Wishes,

Roger M. Smedley, CFP®
CEO

Retirement is Full of Surprises

Retirement was only a few years away for Dan and Patti, and they knew it was time to get everything in order. Living in sunny southern California was wonderful, but they felt it was not the best place for them to retire. It was crowded, the cost of living was high, the traffic deplorable, and it would not allow them to be debt-free at retirement. All things pointed to finding a new city to retire to.

Five years ago, Dan and Patti started their search. Resources, such as Forbes 10 best places to retire, helped them create a list of potential cities. Some cities were easy to check off–they didn’t meet Dan and Patti’s list of must haves:

  • Small but with services including a hospital and modern medical facilities
  • Home price that allowed them to retire debt-free
  • Outdoor activities
  • Favorable tax structure
  • Growing economy
  • Community activities like continuing education

By 2015 they had created a short-list and began visiting the cities to get a feel for the local culture and people.

One year from their proposed retirement date they started planting the seeds in their new city. They purchased a home that could be rented until they were ready to move. They started preparing their home in California to go on the market. The wheels were in motion.

Throughout this five-year process they planned, reviewed, and updated their retirement and income distribution plans. This helped them feel financially confident about this exciting, but unnerving, life transition. It also gave them the financial framework to make their important decisions.

Today, Dan and Patti are living their retirement dream. They are excited about building their new network of friends, doctors, and social connections in their new community. Their new favorite saying is “We don’t have to if we don’t want to because we are retired!”

Some of the challenges they faced throughout the transition into retirement:
Timing the sale of their home
Continuation of medical coverage for a younger spouse
Slow response from employer’s human resource department regarding retirement benefits
Keeping important papers close at hand during the move
Finding temporary place to live until their new home was ready
Small things such as getting a library card while temporarily living outside of the city

Controlling your own time
Less stress and more fun is how Rolayne describes retirement. After a long and rewarding career she decided it was time to turn in her walking papers and she hasn’t looked back. Rolayne says she is busier now than she was before, but now she sets the pace.

Retiring gave Rolayne more time to help care for her aging father before he passed away; something she is thankful she was able do.
She lives an active lifestyle and as an outdoor enthusiast, regardless of the season, she can be found taking a hike or snow shoeing in the mountains. She also enjoys the flexibility retirement offers so she can spend more of her time volunteering for her church. Basically, she is doing what she wants, when she wants and loving every minute.

Retirement is delightful; however, there was some trepidation getting to this point. Navigating health care in retirement was a big concern. Rolayne found that putting the various pieces of Medicare and supplemental coverage together was frustrating and overwhelming.

While there are numerous resources available, it was still difficult to make sure she had the right coverage for her situation. Rolayne sought help from a health insurance professional who could review her options and help her find the right coverage.

Without a pension to provide a stable monthly income, Rolayne knew she needed a plan for using the nest egg she had created. Longevity runs in her family; her income distribution plan is designed with the goal of helping her nest egg provide income throughout her retirement years.

Looking forward to retirement
Retirement should be an exciting phase of life. While transitioning from a career into retirement can be stressful, a plan can help relieve some of that stress and provide a better understanding and framework for this chapter of life.

Using years of experience, we have helped clients navigate the many obstacles of this transition. Let us help you.

Back to School College Planning: Real Advice from a College Student

College. When being described by those with a diploma hanging on the wall, it is a golden age of lasting friendships and high-stakes pranks. When imagined by youngsters that haven’t flown the nest, it is an escape from the demanding thumb of the parents. True, college is a great place to meet new people and discover independence; it is also a challenging time of learning to balance life with money.

The average college student graduates with $24,000 in debt, according to the Project on Student Debt.

college_debt

College doesn’t have to be four years of ramen noodles and Friday nights at home—with the right money management, any college student can have the same outlook (even if it is forty years in retrospect) as those that have moved their tassel.

Tip #1: Look at the Long Run
For as many times as the incoming freshman has been told: “College opens up so many doors, do whatever you want to do,” just remember that you cannot do everything that you want to do. Doing everything you want, satisfying every craving, or buying each impulse item will wipe out a bank account before the end of first semester.

Think about what will matter in a few years, rather than the latest craze or obsession. Will Jerusalem Cruisers last? Probably not. But having enough money to pay for next semester’s rent will matter. Save money for the long run, rather than spend it on something temporary.

Tip #2: Be Budget Friendly
The best way to manage money is to have a set budget and stick with it. Download one of the hundreds of budget-making apps (Mint is recommended), and decide how much you are going to spend and save each month.
Don’t just budget for bills and tuition; also budget for food, dates, books, and socializing. Being budget friendly goes beyond just having a reminder of how much you are supposed to spend though—you have to obey your own rules.
Find ways to cut back, whether it’s buying used textbooks online, having a suburban mom’s coupon book on hand, or trying your hand at a homemade meal. Many college campuses have fun free activities you can participate in. Having a budget will help you save money while still having enough for the essentials.

Tip #3: Shop Savvy
Taking a trip to the store is a dangerous activity; financially, that is. There are hundreds of options and sales, not to mention the pushy salespeople. To stay safe, shop savvy. Know exactly what you need to buy before you even enter the store, and how much you can spend.

Paying with cash is a great way to keep from going over-budget. Swiping a credit card is easy—sometimes too easy. It is easier to spend less when shopping with tangible money.

Be careful about the 5-buck-or-less temptations; those little buys add up quicker than you think. Finally, avoid impulse buys by making a 30-day waitlist. Put random finds and wants on the list. If in a month you still want something, chances are it will really add to your life.

Tip #4: Invest Early
Saving throughout college is the smart thing to do; automate your savings whenever possible. Leaving it in a bank or taped to the back of the toilet, however, isn’t always the best choice. If you’re not swimming in student debt or fishing coins from public fountains, it’s a good idea to start investing.

Before you jump in and make rash decisions, read up. Use the library and find out what will work best for you.

Whatever path you choose, start small. Diversify your investments, and plan on a regular schedule. By investing early, you garner one of the greatest advantages: time. Even if your investments are small, they will grow with time.

Worst-Case Planning May Be Your Best Financial Tool

Dear Valued Financial Partners and Friends,

You may profit by learning how we, as wealth managers at Smedley Financial, engage in two different processes on your behalf. Both on the financial planning side and on the investment management side, we strive to turn the tables upside down by asking the tough “What if” questions.

Regarding your financial planning with us, we first look at the positive side of helping you plan your financial future. But then we flip things upside down and strive to plan for worst-case scenarios as well.

What if you needed more money in your emergency fund? Where will the money come from? What if you or your spouse became disabled? What if you or your spouse died prematurely? What if the younger or healthier spouse dies first? Would you or your survivors be financially okay? What if one or both of you lives 10 or 15 years longer than you expect? What if one or both of you have to go to an assisted living facility? Where will the funds come from? What if you die without a will and possibly a trust? What will happen to your estate?

We hope you can see how this type of reverse thinking in your financial planning is not only beneficial, but essential.

Regarding our investment management philosophy, we strive to emulate this same type of reverse thinking. Rather than being persuaded by best investment case scenarios, the Smedley investment management team continually seeks to ask
itself the tough questions. Over the past 34 years, we at Smedley Financial have seen many people make financial mistakes–some serious and some not so serious.

What if high returns, you know, too good to be true, are promised? Many people lose much of their life savings and perhaps their homes because of the promise of high returns. What if you change your mind and want your money back the next day? Can you get your money back without severe penalties? What if something goes wrong in the future with a proposed investment? What if an investment stops performing? What if an investment drops in value? Who is minding your portfolio and continually looking out for your best interest? When someone boldly states how much money he or she made on an investment ask, “How much risk did you take to get that return?” Are you properly diversified and allocated?

Keep in mind the Will Rogers adage, “I am not as concerned about the return on my money as the return of my money.”
As a nationally recognized Wealth Manager, Smedley Financial’s motto is, “Your financial success is our passion!”

Bullish Best Wishes,

Roger M. Smedley, CFP®
President

Don’t Self-sabotage Your Investments

Dear Valued Financial Partners and Friends,

In the January-February 2015 issue of Money Moxie®, I addressed how Black Swan Events will—at some unpredictable point—affect your investments. The bottom line was, while Black Swan Events are unpredictable, you must control your reactions to these non-controllable events. Now, I would like to talk to you frankly about common ways we have seen some very smart people self-sabotage their own investments.

“I got out of the stock market during the drop, but I never got back in.” Or, alternatively, “I simply didn’t know when to get back in the market. No one rang a bell.”

“I repeatedly told my advisor to keep me in cash throughout the year because of market uncertainty.” (The reality: This individual missed out when the market went higher.)

“The stock market’s going to drop to such and such a point, then I’ll get back in.” (The reality: The stock market never fell to the point predicted and kept going up.)

Defensive reasoning or self-justification are other names for committing financial self-sabotage. Often people, some very smart people, are their own worst financial enemies because of egos, i.e. trying to be smarter than the market.

We have had prospective clients bring their investment statements to us to compare and what is surprising to these people is how staying invested trumps their own trading decisions. (Of course, there are no guarantees or promises of past performance being repeated.)

When worried about Black Swan Events, don’t let your emotions get in the way of making money. Don’t let fear ruin your retirement. Instead, talk to one of our wealth advisors. We have the time, financial talent, and financial training to help you prepare for and navigate through difficult times.

Bullish Best Wishes,

Roger M. Smedley, CFP®
President

What Happened in 2014?

Major Markets Update

The U.S. economy begins 2015 with the best momentum in over a decade. For years investors have questioned whether tepid growth could overcome the slack caused by the 2008 recession and the collapse of the housing market. Now it is time to move on. The question is whether the U.S. economy is strong enough to pull the world out of its current slowdown.

Emerging

Global Summary

There were plenty of reasons to be afraid of investing during 2014: Russia invaded Ukraine, United States joined a war against I.S. (or ISIS), spread of Ebola, and the quick collapse of oil prices.

Europe’s economy shrunk by 0.1 percent in the second quarter and then grew just 0.1 percent in the third. Japan is experimenting with government stimulus and China is slowing down.

In spite of these fearful events last year, the S&P 500 managed to achieve a double-digit gain for the third year in a row. This had not occurred since the late 1990s when the S&P 500 reached a 10 percent or greater rise 5 years in row.

unemployment

U.S. Employment

Approximately 3 million new jobs were created in 2014—making it the best year for new jobs since 1999. Unemployment improved as well, ending the year at 5.6 percent—the best level since 2008.

The average U.S. consumer spends just about every dollar earned. This spending drives nearly 70 percent of the economy. While debt levels as a percent of income are relatively low, so is wage growth.

Incomes in the United States increased at just 1.8 percent during 2014. With that lackluster change consumers are not likely to boost spending significantly.

Oil

Gas Prices

The global supply of oil is surging thanks to producers in the United States and Canada. Members of OPEC seem unwilling to cut production. This combined with slowing global growth led to an epic 55 percent drop in prices since last June. This means lower prices for consumers.

The average price per gallon in December was just $2.54 and prices have continued to fall in January. The savings per household will likely be between $500 and $1,000 in 2015.

Summary

When it comes to investing in global markets, the winners and losers rotate unpredictably each year. Last year, the winner was U.S. large companies. This year it may be different. This is why including large, small, and foreign investments in your portfolio should help you achieve better results over many years.

*Research by SFS. Data from public sources. This is not a recommendation to purchase any type of investment. Investing involves risk, including potential loss of principal. The S&P 500, S&P 600, Dow Jones Global, and MSCI Emerging Markets are indexes considered to represent major areas of the stock market. One cannot invest directly in an index. Past performance does not guarantee future results. Please see disclosure on opposite page for more detail.

Need Help Allocating Your 401(k)?

One of the most common questions we get at SFS is “How should I invest my 401(k)?” This is a critical question, especially considering that 18% of retirement assets are tied up in these accounts (source: Investment Company Institute). Managing your 401(k) may be the most important place to place your financial focus after managing your spending.

First things first—start saving now. Starting early is the best way to get compounding rates of return to work in your favor. Remember, Albert Einstein called compounding rates of return the “8th wonder of the world.”

Next, take advantage of free money by getting the full match your employer offers. Not all 401(k) plans include a match, but if yours does, then make sure you get the full benefit. The rate at which you save is far more important than the rate of return you get. So, keep saving for the future.

Now let’s get into the investing nitty-gritty. Every person must decide how much risk to take in his or her savings. Your risk tolerance should be based on your ability, willingness, and possibly your need to take risk. It will be different than that of your friends and coworkers. It may even be different than that of your spouse.

Your ability to take risk includes factors like your overall financial situation and your time horizon. The more savings you have, the more risk you can take. The longer you plan to invest, the more risk you can take. Why? Your chances of positive returns in stocks go up the longer you invest.

Willingness to take risk is more difficult to determine. The essential question is how well will you be able to handle a drop in the value of your investments? If you view a fall in the stock market as an opportunity to buy more then you may have a high tolerance for risk.

When it comes to picking investments, the easiest route is to find an investment that approximates your retirement date. These all-in-one solutions provide some diversification. While diversification is far from a guarantee, it is still a good way to help manage risk. The pitfall of the retirement date choices is that these don’t take into account your personal situation (health, income, assets, debt, etc.) and they may not even disclose exactly how they are invested.

If you choose to select your own mix, be careful. Selecting the hottest performer last year can get you in a lot of trouble. Distributing your account balance evenly into each option is certainly not the way to go either.

This is where a little research and help from a professional can help. Give us a call. We can help you navigate the 401(k) maze.

What’s Your Happiness Index?

We have all heard the adage “Keeping up with the Joneses.” For many, this adage reflects a perception of happiness – seeing what others have and believing it creates an abundance of happiness in their lives. In reality, the desire to have more often results in less satisfaction.

When asked, most people would say if they had $_______ more (you can fill in the blank), they would be better off, financially speaking. It’s hard for most Americans to believe someone earning a handsome six figure income, say $400,000, can feel broke. But it happens.

This “getting ahead” mentality occurs at all income levels and generally has the same effect. As our income increases, even slightly, we think: “How can I spend this additional money?” More often than not, the answer is a purchase. Maybe it’s upsizing your home, moving to a better neighborhood, getting a new car, or buying a recreational toy. There is no limit to the human desire to have more.

We’d like to introduce a new idea. Perhaps getting ahead doesn’t mean buying more stuff. After all, what exactly are we getting ahead of? Contentment and happiness come when we are comfortable living within our means.

happiness

Financial Freedom
Debt does not create freedom. The treadmill of borrowing more money to buy more stuff gets tiresome and stressful. We become so focused on finding a way to pay for our lifestyle we seldom really live in and enjoy the present. Freedom comes from having enough discretionary income to cover the unexpected curve balls life can throw your way. Discretionary income provides the flexibility to slow down and enjoy the life we are living and the lifestyle we are striving to create.
Contentment Creates Happiness
This in no way implies that we shouldn’t strive to improve our lives and better our circumstances. The point we are trying to make is that using someone else’s lifestyle as a measuring stick for our personal happiness generally has the opposite effect. If we never feel we measure up financially, we’re going to be hard pressed to feel happy or content. Setting realistic expectations and balancing wants and needs is a starting point.

From there we must break down our income to first cover non-discretionary needs. This would be a roof over head, food on the table, electricity, etc. Then we prioritize wants and determine how to use current resources to cover these items. At the end, there should be discretionary money that is not appointed to any specific goal, other than creating excess cash – savings.

The Happiness Index
Balancing our wants with the ability to pay for them is a challenge. There have to be trade-offs. Buying the newest high-end luxury car may result in a high level of debt. On the other hand, a beat up jalopy with high miles may not last long. The idea is to purchase a vehicle that meets your needs and that you can reasonably afford. That way you feel good about the purchase and still have some cash flow flexibility. This decision making process is your happiness index.

Each time you spend a large amount of money or commit monthly cash flow to an ongoing expense, ask yourself, “How will this financial transaction impact my happiness?” Applying this technique will help set you on a positive financial course. In the words of author Mitch Anthony: “Be content with what you have right now. If you can’t enjoy it now, you won’t enjoy something
better later.”

6 Mistakes Could Send You Over The Retirement Cliff

Retirement is a balancing act. It’s like a person walking on top of a wall. On one side is a cliff with a pool full of sharks. On the other side is a white sandy beach surrounded by blue water and a cabana set up waiting for you with a tall glass of lemonade. If you make a big mistake with your money in retirement, you can find yourself being eaten alive. If you are wise with your money, you can find more comfort and relaxation. Below are six critical mistakes that have the potential to devastate a retirement plan.

Lack of communication
You need to communicate your expectations for retirement and what it looks like. Discuss how much money you will need in order to accomplish all of the activities you want to do: travel, home remodeling, etc. Know what money is intended for major expenses and what money is intended for monthly living expenses. If you spend too much on large one-time expenses, you may seriously jeopardize your monthly income.

No measuring stick
Many retirees have no way of knowing if their money will last through retirement. In part, this is because they are not using a measuring stick. As a general rule of thumb, you should not spend more than 4 percent of your retirement assets per year. Another good benchmark is a 4-year checkup. After 4 years of retirement, if you have more money than what you started with, you should be on the right track. At Smedley Financial we use an elegant system that tracks yearly progress and lets you know whether you are going to outlive your money.

No spending plan
Too many people spend more than they should and don’t realize it until it is too late. Once they realize the mistake, they have to dramatically change their lifestyle. You should create and live by a monthly spending plan. When looking at potential expenses, evaluate how they will affect your goals. For example, helping out children can be one of your goals, but it might compete with your needs for security and independence. It is usually the hard decisions like this that seriously harm a retirement plan. With children, set clear and simple boundaries. Explain that you are taking care of yourself so they won’t have to.

Investing extremes
Many people believe that at retirement they should put their money in the bank. Others feel they need to make up for lost time and invest aggressively. Both approaches have problems. Conservative investors often underestimate the negative impact of inflation over time. You may be in retirement for 30 or 40 years. Conversely, overly aggressive investors may lose their shirts as evidenced by the recession of 2008-2009. To address these issues, take a balanced approach that doesn’t have you investing at the extremes.

No plan B
Most people assume that bad things happen to others. We realize bad things can happen to us as well, but often act as if we are willing to play the odds that it won’t. Consider this sobering fact: at age 65, a typical married couple in good health can expect to spend $260,000 on healthcare costs during their remaining lifetimes. Have a plan B in place to cover unforeseen expenses like long-term care costs, medical expenses, and home repairs that are not covered by insurance.

Falling for a scam
As always, if it seems “too good to be true” it probably is. On April 30, 2014, the Securities and Exchange Commission (SEC) halted an IRA scam in Utah that cost investors $22 million. The company had been “paying” 12 percent on paper, but when investors tried to get their money back they were given the runaround. As with most scams, it is unlikely they will recover their money. Look out for red flags. Don’t jump in just because somebody promises great returns. Look for a track record for the product and for the company. Even if the investment seems like it is on the up-and-up, it may be a good practice to dip your toe in the water before you jump in with both feet.

Retirees get into financial trouble in dozens of ways. If you feel like you are being eaten by sharks, don’t despair. Seek out a trusted professional at Smedley Financial to help get you back on track. If you have managed to avoid these six common mistakes, give yourself a pat on the back, sit down in your private cabana looking at the crystal blue water, sip some lemonade, and enjoy the beauty of retirement.

 

  1. http://money.cnn.com/2007/08/13/pf/expert/expert.moneymag/
  2. http://www.retirementoptimizer.com/
  3. Center for Retirement Research at Boston College, “What is the Distribution of Lifetime Health Care Costs at age 65?” March 2010
  4. http://www.thinkadvisor.com/2014/04/30/sec-halts-ira-scam-that-cost-investors-22-million