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.
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Securities offered through AW Securities, a Registered Broker/Dealer, member FINRA/SIPC. Check the background of this firm on FINRA's BrokerCheck.
1The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.
2Scott Hanson (2011, 2012, 2013, 2014, 2015 & 2016) and Pat McClain (2012, 2013, 2014, 2015 & 2016). Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
3As of 01/20, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $8 billion in total assets under management and administration.
4Barron’s 2019 Top 50 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
✢Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.
✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.
†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.