The Right Stuff - Money Tips for 2016

Creating a financial profile requires an “honest” assessment on your attitude toward money. Here’s an example of investor conflict often revealed after taking a risk tolerance test: The test results reveal a moderate conservative personality, but the investments in the 401(k) are dominated by aggressive growth funds. The test itself may not be scientific, but it should cause a conversation between the investor and the advisor. A life-expectancy test can establish a timeline for basic assumptions for retirement planning or cost projections on long-term care and medical expenses. But, it’s also a road map for milestone events that occur in most of our lives, such as getting married, having children, funding college education, buying a home or planning for retirement. Timeline planning around life events can trigger conversations between an investor and an advisor on financial goals. Once financial goals are established, you and your advisor can create planning strategies and tactics to prepare you for each life event. Then you can discuss financial products based on your risk tolerance to achieve your goals.

Ted Meyer, RFC, IAR, recommends having real expectations on rates of return. Watch the video interview with Ted on Right on the Money at http://rightonthemoneyshow.com/tips-for-2016-buying-the-right-stuff-ted-meyer/ It’s important to know the fee structure of the advisor, the expenses of the financial products you buy and the retirement administration costs of your plan. You don’t want to wait until retirement to discover all the costs of your plan and the investments you purchased. We all have a history with money that has formed our opinions as consumers and investors. We may need to adjust our predispositions toward money by shedding our money myths and create an open environment of trust with our advisors. We need to approach our money decisions with eyes wide open and demand full disclosure.