Twenty years ago, a dollar saved lost roughly half of its value. Seniors nearing retirement and those already retired are at risk from this inflation type. Since 2000, the buying power of the US dollar has dropped by an astonishing 44.2%. According to the government’s official inflation monitor, the Bureau of Labor Statistics (BLS), inflation may be worse than previously thought. While interest rates are at historic lows, the Federal Reserve’s inflation-inducing practices may be working against it. What does this entail for those nearing or already in retirement? The term “diversification” is likely brought up by your counsel or team of advisers at some point. Although it was formerly considered a “good notion,” diversity has become an urgent need since 2020. Diversification may be the only way to thrive in an increasingly turbulent investment market. A retiree’s worst nightmare: outliving their assets, can be avoided by diversifying or establishing so-called “hybrid” retirement strategies. Diversification and risk minimization are essential elements of well-thought-out financial strategies. Contrary to what some consultants advocate, there are no shortcuts or “one-size-fits-all” templates to speed up the process. It is impossible to generalize about portfolio allocation. According to some financial advisors, investing in a wide range of assets is the only way to secure a well-diversified portfolio.
To what end does one want diversification?
Keeping track of and managing different assets is a hassle for many people. Therefore, they don’t want to distribute their money around. Retirees and those nearing retirement should consider several sources of income. Each asset’s advantages, hazards, and growth potential vary.
Social Security
Although Social Security is a reliable source of income, retirees should not rely only on it for their retirement funds. As of year 2020, the average monthly Social Security benefit will be $1,503, which is insufficient for most seniors. Debt instruments that pay fixed interest, such as bonds, are often utilized to establish various retirement plans. Interest on these types of investments is typically paid twice a year. Upon maturity, the investor receives a return on the initial investment. The recent volatility in the stock market has made it evident that growth typically comes at a higher cost. Consider this option only if you know exactly how much risk you’re prepared to accept and whether you’ll have enough time to recuperate from any losses you might suffer before making a decision. There is a real possibility that seniors who put too much of their retirement savings into the stock market might be out of luck for years if the market goes down. When stock prices fall, retirees may be forced to withdraw larger sums of money, reducing their retirement savings quicker. You should talk with an experienced financial advisor to discover if you have the proper amount of money in stocks placed in your account. They will be able to guide you and create a plan properly.
“Safe money” vehicles
Safe money products such as permanent life insurance and annuities are essential to a secure retirement. Building your portfolio around tried-and-true items makes more sense than just throwing them in as an afterthought. There are several benefits to investing in less risky and tax-friendly goods, many of which give guaranteed income streams. You’ll be able to make better decisions about your financial future if you have a steady stream of money. You won’t lose any money if you sell your bonds, unlike if you did. You may also utilize these goods to leave a lasting legacy for your family members, which you will be leaving behind. Financial safety nets, such as annuities and life insurance, offer certain tax advantages not seen in other forms of money management. Depending on your appetite for growth and risk tolerance, there are various ways to diversify your retirement portfolio. You should perform your homework and due diligence before making these “exotic” investments. Then chat with a reputable financial counselor who will give you the truth and not attempt to sell you something. In retirement, financial blunders can harm your well-being. The good news is that you may prevent these blunders by utilizing feasible alternatives to traditional planning and building a more secure and resilient “hybrid” portfolio. As a member of Syndicated Columnists, a nationwide group dedicated to an open approach to money management, Brad Rhodes resides in Lexington, Kentucky.
Contact Information:
Email: [email protected]
Phone: 8043014291
Bio:
Stuart Hunsicker is a managing partner, retirement specialist and federal employee benefits specialist here at Purpose Driven Financial Services. As firm co-owner with Zar Razack, the two have a natural chemistry that allows them to work together effortlessly. “Once we decided to really commit to pushing the firm forward, we knew that we could be effective,” Stuart says. “We work very well together and complement each other’s strengths and weaknesses.”Stuart considers himself more of the “analytical and numbers” half of the duo. With more than 20 years of experience in the financial services industry, he has become an expert at assessing each individual person’s situation and deducing how much they might need in retirement. Once he arrives at the target number, Zar steps in as a specialist to design a plan that includes specific elements that will help clients reach that number.A VCU-Richmond graduate with a degree in finance specializing in business, Stuart has seen nearly every side of the financial industry. Early in his career, he worked for smaller firms and was in charge of trading and investment portfolios. He also held a Series 24 license and signed off on variable business within the firm. “I wore a lot of hats,” he says. “I focused on the investment side, but when the markets crashed, I just took too many phone calls with crying voices on the other end.”Those tough phone calls led him into the insurance side of the business. He now considers “retirement surety” his focal point and believes in making sure that each client is prepared for retirement before they move to the next step. Once the retirement plan is put into place, the rest is icing on the cake, helping give the client financial freedom.PDFS certainly isn’t exclusive, but Stuart is extremely passionate about working with teachers and federal workers. His beautiful wife of nearly 20 years, Andrea, is a teacher, so he’s very familiar with the issues they face and tends to gravitate toward clients who serve and assist. He has also experienced many of the hypothetical scenarios he raises to clients. What if a spouse passes away suddenly, or what if you’re forced into retirement early? Stuart has been there, and he knows how to navigate those rocky waters.He and Andrea have one son, one daughter and eight cats. “We’re the crazy cat house,” he says. His oldest cat is almost 20 years old and was the first to join the Hunsicker family, even before Stuart and Andrea married. The first cat needed a friend, of course, so they adopted one more. Andrea always loved tabby cats, so when her colleague told her that a stray tabby gave birth to a litter of kittens in the backyard, the family loaded into the car to have a look. “When we arrived, there were three kittens. My wife fell in love with the tabby, and my daughter took to a different one, then we couldn’t just leave the third one behind,” Stuart says. “At that point we were known for being the cat people, and it was at that point that three more found their way into our family.”Stuart is a massive college basketball fan, even making a trip to the 2022 Final Four. Though he doesn’t have much free time, he and Andrea love to attend sporting events. Stuart also enjoys spending time with family, and they often go shopping, to the beach or to try new local restaurants. He says, “We’re just a normal family that loves being around each other.”
