What’s Important

One of the things I find when I talk with people when they come into our office is, they have their retirement savings in places they don’t really want it. A typical client has their retirement money in stocks, mutual funds or bank accounts where they’re making basically no interest.  During our initial visit I always ask the same question.  “When deciding what to do with the money you are saving for retirement, what is most important to you?”

  1. Making sure our money is safe.
  2. Having the potential to earn higher interest and growth
  3. Being able to move our money at any time.

Most people I talk with tell me safety is their number one priority.  When I ask what the second concern is, most people tell me interest and growth potential.  So of the three factors, safety is #1, interest and growth potential are #2 and liquidity is #3, or least important.

For most people there is a difference between what they want and what they have.  If a client has their retirement savings in a stock mutual fund, what does that give them?  Interest, growth potential and liquidity. The opportunity for growth is there along with liquidity but their money is not necessarily safe.  Think about this if the market declines so does their retirement savings.  So if safety is most important, do you see the disconnect?  What about retirement money in bank accounts or money markets , what does this give them, #1 Safety, #2 liquidity, but what about interest and growth?  If this is important, do you see the disconnect here

In both cases there’s a difference between what the client wants and what he has.  In all my years as an advisor, this difference is the reason many clients don’t sleep well at night.  So, what are you really trying to achieve with your retirement savings?  #1 Are you trying to create a steady reliable income in retirement?  #2 Do you want your income to be guaranteed to continue for the rest of your life? #3  Do you want to be able to know right now what your income will be without guesswork?  If the answer to these questions is yes, make sure the way you have your money positioned matches what you want.  As always talk to your financial advisor about your best options.

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