Over 50? It’s Time to Shift Your Financial Gear

Lots of things change as we get older, and things that were right for us at 30 seem out of place at 50. Knowing when to switch gears in life is important, whether it’s in the jeans you’re wearing or your financial planning.

shutterstock_120776140For a large portion of your life, your focus of course was on career and financial growth. Now, if you’re between 50 and 75, your goals and focus are changing dramatically toward retirement. Likewise, your financial planning should shift. Many retirees make a huge mistake here by not changing the course from financial growth to wealth preservation. But if you want to relax, enjoy the benefits your hard work has earned you and spend during these decades with confidence, then wealth preservation should now be your focus.

What’s the difference between financial growth and wealth preservation? The biggest difference is risk and loss. This isn’t the time to be aggressive with your investing since losses will be difficult to recover. It’s easy to see how this comes into play by looking at an example. Let’s say you have $200,000 in a mutual fund and it sustains a 30% loss. Now that investment is down to $140,000. Can a 30% gain now counteract that initial $60,000 loss? $140,000 X .30= $42,000 …not by a long shot. You would need over a 40% gain to recover AND break even.

So now you see why it’s so important to make the shift to focus on markets that minimize risk and preserve wealth. Less than 1% of retirement income planners in the U.S. know and utilize the strategies that I am going to suggest. Now’s the time to step away from the instability of the stock market ticker and stop worrying about an impending bond bubble burst. Instead, I recommend clients of retirement age place their money into insurance and annuity contracts, some of the securest vehicles available.

What makes insurance and annuity contracts so secure? Safety nets like state regulations and re-insurers. They pay if a company ever defaults. Try to get that type of security from a mutual fund! Also insurance companies can only invest on a 1 to 1 ratio, unlike banks who can invest at 9 to 1. What these regulations do is make insurance contracts extremely secure. Just the word you are looking for when deciding where to place your assets.

Change is inevitable throughout life, and by repositioning assets during your retirement era, you can better ensure financial stability and confidence in this exciting stage of life.

If you’re ready to discuss financial strategies that will help you shift gears as you near retirement, give me a call at 215-968-1755 or fill out the contact form on our site and I will get back to you shortly.