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You might have seen Wednesday's front page headlines from The Wall Street Journal and The USA Today:

"Markets Reel in Global Selloff"
"1,000 Point Sell-Off Rocks Stock Market."

Here we are again. Volatility, worry and advice: Sell! Buy! Don't sell! Don't buy!

It's easy to feel like you need to react and "do something" when the markets are turbulent and you're bombarded with advice. Often folks react in ways that hurt them financially more than help them.

Here are 3 Mistakes to Avoid. Don't..

1. React Emotionally

Angry-girlThis is what the stock market does: it goes up and then it goes down. Sometimes a lot. And sometimes very quickly. If you have a lot of retirement money in the stock market, it's hard not to be scared by these wild swings. But panicking isn't a good way to deal with your worry.

Use this market correction to evaluate your situation.

If you aren't comfortable with the stock market swings, or you can't afford to lose any of your retirement money in the short term, then the stock market is probably not a good fit for you.

You can't get financial peace of mind if you are emotionally and financially tied to riding market highs and lows.

2. Leave your money in the stock market, no matter what

stock-market-fluctuationWhen the market takes a nose dive the common and predictable advice is: "Stay in the market for the long-term." This advice may work if retirement is 10-20 years away. But it doesn't work for someone who wants to take a distribution from their 401(k) this month or in the near future.

As you think about your retirement needs, make sure that you can weather a stock market downturn with your retirement funds and still retire.

3. Keep all your money in one financial product

retirement-jarYou do better financially when you have diversification. Many people talk about diversified stock market portfolios. But this is not what I'm talking about.

My clients sleep better at night when they have a financial strategy that captures the upside that the stock market can offer, while limiting and, in many cases, eliminating the downside of a stock market plummet.

There are a number of ways to accomplish this.

For example, you may want to keep some retirement funds in the stock market to capture growth while placing other funds in different products that focus on safety.

My point is - there are lots of financial products that will fit into a well-conceived lifelong financial strategy. Take advantage of them.

One final thought - stock markets respond to world events and politics. Scary headlines and worrisome world events do affect your 401(k) and its long-term value. Ask yourself how much you want your retirement money tied to unpredictable and uncontrollable world events.

There are other options. I'm here to help you understand and implement them. Even in tumultuous times, you can have financial peace of mind.

Sincerely,
Dwayne

Published in Coach's Corner

Tax Advice

I talk to a lot of people who will never be rich, but who certainly don't deserve to be poor.  When you plan for your retirement, there are straight forward strategies you can use to help ensure you don't end up outliving your retirement funds.

Over the next few months, I want to share with you four simple, yet powerful, financial strategies that will help you get the most out of your retirement money.

1. Start Planning for Your Retirement Tax Situation NOW!

Everyone hates this piece of advice. Minimizing your tax liability in the future seems a challenging prospect. I know of only a few people who like to spend their time thinking about taxes.Tax

But I promise you - it's where you're going to see some of the greatest gains to your retirement income.

Consider these facts and then answer the question below:

  • an 18 trillion dollar U.S. debt,
  • a looming estimated cost of almost $40 trillion to make the Social Security, Medicare and Medicaid financially solvent for the next 75 years,
  • local city and state government budgets over-extended,
  • the increasing cost of the "War on Terror" and the U.S. military budget,
  • a crumbling national road, bridge and underground infrastructure in desperate need of repair

Do you think taxes are going up or down in the future?

I believe taxes are going up.

If the only retirement product you own is a 401(k) or an IRA, or another qualified plan, remember you have just deferred paying tax, not eliminated paying it. The U.S. Department of Revenue wants their cut of your future income.

If you didn't pay tax when you put money into your retirement vehicle, then you're going to pay income tax on it when you take it out. And if tax rates are higher and your retirement deductions lower...you'll end up paying more in tax. A LOT more.

Plan-NowYou don't need to grit your teeth, stare straight ahead and just accept this tax situation. There are many financial strategies that will give you tax planning flexibility.

You just need the time to develop a flexible retirement strategy and to implement it. That's the point of planning BEFORE you are ready to retire.

Make the commitment to review your retirement tax scenario NOW.

We can work together to evaluate your retirement tax situation and then choose financial products and strategies that will give you the greatest financial flexibility while reducing your tax burden.

Sincerely,
Dwayne

Published in Coach's Corner
Thursday, 26 February 2015 06:43

Is Your Money Working Together?

Ever been on a team that is working well together?

When you're on a strong team, be it a sports team or a business team, the unique gifts and strengths of the individual members contribute to the success of the whole.

Seattle-SeahawksIn fact, on a strong team, like say, the Seattle Seahawks, while the strengths of each individual member are obvious, it's the team working together that gets to the Super Bowl.

Let's apply this same team approach to your financial strategy.

Instead of thinking of your financial resources as isolated financial products, think of each financial product you have as a individual player on your financial team.

For example, don 't think about your bank account, 401(k), real estate, life insurance policy, certificate of deposit
(or any other product) as isolated money in "separate buckets."Money in cups

Instead, consider how your different financial products might actually work together to make your financial situation stronger.

When you develop a lifetime financial strategy that factors in the strengths and weaknesses of each financial product, along with your life values, then you create a winning financial team.

Your retirement strategy should take into account your life values and needs and potential life events - both planned and unplanned.

Then, each financial tool or product should be evaluated as to how it will contribute to your financial team and enable you to achieve your goals.

Financial-Gears

Pete Carroll, the Seahawks Coach, looks for defensive players that fit his strategic vision. He bids farewell to highly capable players that don't fit his long-term goals or whose strengths don't match his needs.

Think about your financial products in the same way. Choose each financial player carefully with your retirement needs and goals in mind.

You don't have to build your financial team alone. We know Pete Carroll looks to his management and coaching staff for expertise.

And that's why I'm here. Together, we can build a winning financial team that provides you with a secure retirement.

Sincerely,
Dwayne

Published in Coach's Corner

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