Today’s Mission:

Fuzzy financial math preys upon investors (and quite frankly, advisors) when it comes to retirement planning. Find out whether you’re a victim.

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(Click the featured times below to jump forward in the episode)

The Briefing:

  • 2:25 – Mailbag: Hans says he hates having money in the bank because it doesn’t earn enough interest. He wants to know if there’s a better place for his emergency fund.
  • [spp-timestamp time=”8:20″] – Getting To Know You: J’Neanne tells us about her areas of expertise outside of the financial world.

Strategy Points:

14:14 – Fuzzy Financial Math: Mutual Funds Lead To High Average Returns. 

  • We really need to qualify what counts at “high average returns.” Sure, your mutual fund might have averaged 7.5 percent. Out of context that sounds pretty good, but what if the market has experienced higher returns? Furthermore, have you accounted for the fees and costs associated with your mutual fund? Those fees could be preventing you from even higher returns. That’s not to say mutual funds are bad. It’s just that you must make sure you’re paying close attention to the numbers in your portfolio.

16:44 – Fuzzy Financial Math: Taking Social Security At 70 Is Best.  

  • Everyone knows once you turn 70, you’re eligible to withdraw the highest amount of Social Security. Folks naturally then deduce this is the best strategy. However, it’s important to think beyond the numbers. Ask yourself, “How long am I going to continue to work?” “How long is my spouse going to work?” “What’s the age difference between my spouse and me?” “What’s my family history?” “How long do I expect to live?” The answers to these questions will help you determine the best age to start taking Social Security. Maybe it’s better to wait. Maybe it’s not.

18:33 – Fuzzy Financial Math: I Don’t Have To Save In Retirement.

  • It’s natural to think you won’t need as much income in retirement. Therefore, you might think you’ll need to save less. To that we’d say, “Says Who?” Many folks find it difficult to spend in retirement because they’ve been in the habit of saving for so long. You’ll still save in retirement, but the way you’ll save could look different. A properly diversified portfolio will help you to save in that it’s earnings will offset taxes and inflation. In short, yes, you’ll continue saving in retirement. You’ll just do it differently.

The Grand Plan:

[spp-tweet tweet=”Don’t fall victim to fuzzy financial math in retirement. Closely examine the numbers, and have your advisor hold you accountable to your financial plan. – Your Financial Mission“]

The Spy Kit:

Click the image to get a free retirement rescue toolkit.

More Intel:

The host: J’Neanne TheusContact – Call: (443) 718-6310


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