With so much economic uncertainty causing angst these days, it’s no wonder why so many folks have been paying close attention to their personal finances. And so we asked two of South Jersey’s leading financial minds to offer some tips on how to weather the storm and make sound decisions in both the short- and long-term.
How have factors like the pandemic and inflation impacted one’s retirement plans and how do the challenges differ if someone is closer to retirement vs. still in the middle stages of their career?
“It’s hard to realize this while we’re living it, but challenging times like these (pandemic, soaring inflation) will pass. Historically we can see that no matter what the crisis, the market eventually recovers. And that there’s always another crisis around the corner. Time in the market is better than timing the market. Someone still building their career has more time to save and let their investments grow. A new retiree will positioned more conservatively.”
--Ted Massaro, principal, M Financial Planning Services
“Inflation is always a factor and should always be considered in any financial planning exercise—especially in today’s economic environment. We stress in the planning process to factor in an increasing need for your retirement dollar because of inflation and always shave a percentage of allocation to guaranteed increasing payout options.”
--Stan Molotsky, owner/president, SHM Financial
What’s the best way for one to identify their risk tolerance and how can you help them in that regard?
“Risk tolerance is different for everyone and can change depending on what stage of life they may be in. That’s why it’s crucial to meet with our clients every 12-18 months to readdress their current risk tolerance and adjust accordingly.”
How can you address fears for retirees who worry about outliving their money
“We continually tell our clients that retirement may last a lot longer than you think. Longevity is rising so much that we may expect to live 30 years or more in retirement. There are additional challenges, including the rising cost of health care. On the other hand, many retirees are working later—not only for the financial benefits, but just to stay active. They’re gradually phasing into this new part of their lives. No matter your situation, our advice is to start planning, the earlier the better.”
Do you encourage investors to be proactive and vocal with regard to their financial planning?
“We have always encouraged investors to be proactive and vocal as to their specific financial planning needs and always encourage our clients to keep in touch with us. And we stress to them that nobody will take better care of their money than they would. We are just here to continue to explore the various options with them, just as we’ve been doing since 1958.”
“Absolutely, a financial plan is a living document that is a collaboration between an individual and their advisor – it’s all about gathering the many pieces of your financial life and balancing your goals and priorities. The advisor brings their skills and knowledge to help put those pieces together. No two financial plans are alike, and they need to be revisited at least annually. Having a proactive and communicative client is a must.”
Published (and copyrighted) in Suburban Family Magazine, Volume 13, Issue 9.
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