Are you 100% confident in the decisions you’re making with your savings?
We’ve seen a lot of hard-working people who are about to retire make a single bad choice – and it’s derailed their plans before they can happen.
It’s critical to keep in mind that the closer you get to retirement, the less room you have for error because there’s less time to recover.
We want to help keep you from making mistakes.
So, as retirement inches closer, avoid these three common missteps.
In a perfect world, all financial advisors only make recommendations that are ideal for you.
But in the real world, that doesn’t always happen.
To protect your money, be wary of:
Annuities: If you’re over 50, you’ve probably heard of annuities. And yes, they sound viable: you hand over a lump of cash to receive an income stream for life. Because of this, they’re sometimes considered “no-brainer” investments.
But at Allworth Financial, we believe otherwise.
While not all annuities are bad, they are among the most abused, complex and misunderstood investments out there.
Permanent Life Insurance: This type of insurance product blends a death benefit with a savings or investment portion. The policy holder can then borrow funds against the “cash value.”
And while permanent life insurance can be appropriate in a few, specific instances, this product is a questionable investment choice for the average retiree because:
Gold: Gold is often pitched to you using fear-based marketing tactics. It’s touted as a “must-have” investment that offers protection if the economy craters, with the goal of scaring you into buying.
But we don’t believe gold is a worthy long-term investment for numerous reasons, including:
Sometimes, a so-called investment isn’t merely “inappropriate” for you, it’s a downright scam.
And we get it. It can be tempting to want to believe in big promises or guaranteed returns. Similarly, the idea that you’re getting in on an investment before everyone else – or getting exclusive access – can be exciting.
But this is precisely when your internal alarm should go off. Especially because the average retiree who becomes a scam victim loses about $30,000.
Be on the lookout for any of these tactics:
And, once and for all, let us be clear: There is no such thing as a “risk-free” investment.
If you’re thinking of working with an advisor (and even if you already work with one), the most important question we want you to ask that person is: “How do you get paid?”
Are they strictly commission-based, or more fee-based?
Because the answer will reveal the advisor’s true motivation: Are they working in your best interests, or in their own?
Please make sure your advisor is what’s called a “fiduciary.” This means the advisor must legally place your interests above theirs.
If your advisor is not a fiduciary, their advice could be biased for various reasons, including:
From what we’ve seen over the years, pre-retirees usually make financial mistakes due to a lack of experience. And missteps made right before retirement are usually the hardest to bounce back from.
Thankfully, you have the power to change that.