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January 2015: Back to the Basics

In Back to the Basics, Income Planning, Investment Management, January 2015 by Adam Cufr

2015 Financial Trends: Are You Prepared For What’s Coming?

Plummeting gas prices and a Jekyll and Hyde stock market have many people asking what it all means. “Is it good to pay $1.70 for gas or is that bad?”

As a retirement planner, my role is to help people who are seeking financial retirement achieve enough retirement assets so they are able to live fully and help others in the process. In light of this extremely complex matter of coordinating all areas of one’s financial life including investments, Social Security, pensions, spending, taxes, health care, estate planning, and more, I must be aware of trends that may affect the plans we create. Our goal is to have our clients prosper down markets and up markets. I will offer you here a glimpse into the trends that may have an impact on your financial security. These are current trends that your planning needs to address in order to maintain your future lifestyle and your dignity throughout your golden years.

Record high stock market: Should you keep your foot on the gas or is it time to apply some brake?

Very few people that we meet for the first time have a clear understanding of the amount of risk they’re taking with their investments. If the record high stock market chooses to retreat, as it does after long successful growth periods, are your investments positioned to prevent major losses from adding years onto your working life?

Painfully-low interest rates: A great opportunity for young home buyers but a war on retirees.

Traditional savings vehicles like CD’s and bonds continue to pay very little interest. Meanwhile, a rise in interest rates threatens the value of any bonds you may own inside retirement plans like a 401(k) or an IRA. Is your nestegg sitting on a rising interest rate time-bomb?

Geo-political events: A major world event has the power to upset markets without warning.

The same forces that have caused gas prices to plummet in very short order can wreak havoc on commodities prices just the same. Add to that the unstable governments of a number of very powerful countries and it’s enough to keep anyone up at night.

So how does one anticipate these trends and plan confidently in light of them? The planning process must begin with a clear agreement on objectives. For example, are you trying to grow your money as much as possible or are you at a stage where you may choose to reign in the level of risk you’re willing to take? Do you know when you’d like to be in a position to stop working for money? If so, do you know how much savings that would require? Once you identify your objectives, learning the options available can result in a very powerful retirement plan that anticipates and responds well to good times and bad. It’s very possible to sleep well at night when you have sought good counsel and are committed to doing the work required. The alternative is to simply guess and hope. You deserve better than that.

About 

Adam Cufr, RICP® (Retirement Income Certified Professional®) is a financial advisor and founding principal of Fourth Dimension Financial Group, LLC providing personal finance and retirement planning services. Adam is a Columnist for Retirement Advisor Magazine. He is also a sought-after media commentator and thought leader. Adam was named one of The 20 Most Creative People In Insurance in 2015 and is a columnist for Retirement Advisor Magazine and the author of Off the Record – Secrets to Building a Successful Retirement and a Lasting Legacy.

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