How To Catch-Up Your Retirement Savings at Any Age

How To Catch-Up Your Retirement Savings at Any Age

Have you ever felt your retirement savings is a living manifestation of the expression “two steps forward and one step back”? Many have experienced this type of financial anxiety. While you probably feel like throwing in the towel and jumping a plane to Borneo, take heart in knowing it’s never too late!

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It's Retirement O'Clock. What is Your Real Risk Level?

Be warned, says FINRA (the Financial Industry Regulatory Authority) to investors: ALL investments carry some degree of risk. The term risk, FINRA explains, refers to  “any uncertainty with respect to your investments that has the potential to negatively affect your financial welfare.”

Here at Worley Erhart-Graves Financial Advisors (WEFA), we often remind clients of the following FINRA explanation: “The level of risk associated with a particular investment or asset class typically correlates with the level of return the investment might achieve. The rationale behind this relationship is that investors willing to take on risky investments and potentially lose money, should be rewarded for their risk.” 

Often, we find, clients will use terms such as
“conservative”, “moderate”, or “aggressive” without really understanding either the true risk level inherent in each of their current investments or just how risk-averse they themselves actually are!

At WEFA, there are certain questions we help investors explore:

  • How much could I lose if we have a market correction?
  • How much money will I have at retirement if all goes as planned?What if it doesn’t?
  • What might happen to my portfolio if interest rates rise?
  • How protected am I with insurance – medical, property-casualty, long-term care?

One important service offered at WEFA is portfolio management. We establish accounts for clients at Charles Schwab & Co., Inc. as custodian. But, before any of that happens, the first step is to develop a customized investment plan based on each client’s needs and risk tolerance. Then, every year, we perform an in-depth review of the portfolio and present recommendations for rebalancing changes. 

We firmly believe a comprehensive financial plan needs to be based on all aspects of one’s financial and personal resources and goals.We want to ensure clients put their money where their real risk tolerance level is!

Content was prepared by a freelance journalist on behalf of Worley Erhart-Graves Financial Advisors

Is It "Vive La Difference" When it Comes to Retirement Planning?

Yes, Worley Erhart-Graves Financial Advisors is an all-female firm.  Our financial planning clients, on the other hand, represent both sexes. That explains why, when we came across two articles discussing differences in the way the two sexes view retirement savings, we were interested in what the authors had to say.

Northwestern Mutual’s “2013 Planning and Progress Study”uncovered “a major difference” in risk tolerance between men and women, with 17% of men inclined to invest in the market versus 8% for women.  Men were ahead of women in funding their 401(k) accounts, and 75% of male participants said they made investing decisions on their own (versus women at 64%).

The Journal of Financial Planning’s “Stat Bank” included some interesting gender comparisons as well.  While 43% of women said advice from a financial planner was key to their picking mutual funds, only 29% of men agreed.  Men were ahead of women in terms of having begun to save for retirement (65% of men surveyed versus 53% of women).

Here at WEFA, we can’t argue with the conclusion stated by Northwestern Mutual executive vice president Greg Oberland: “While the differences in perspectives between men and women are interesting, ultimately our study found too many people – regardless of gender – ended up in the exact same place: trying to play catch up.”

In our financial planning practice, we’ve come to understand some of the reasons why too many investors of either gender find themselves in catch up mode. Simply put, you’re busy.  You’re balancing careers, families, and community obligations.

You come to us because, while you have the knowledge and the desire to be on top of your financial affairs, you simply don’t have the time or expertise to handle your own financial planning, manage your portfolio, or prepare your own taxes.

“Vive la difference!” we say. But whether you’re male or female, at Worley Erhart-Graves, our advisory services are designed to help put a sound, personalized plan into place, one that makes sense for you!

Content was prepared by a freelance journalist on behalf of Worley Erhart-Graves Financial Advisors

Financial Planning Focuses on the Only True Silver Bullet

“Financial rules of thumb are just that.  If you follow them, you have the satisfaction of knowing that you’ve taken action – but they do not guarantee you’ll get the results you desire,” says Dan Kadleck, writing in Time. 

Fidelity offers some actual savings guideposts:

  •        At age 35, you should have saved an amount equal to
           your annual salary.
  •        At age 45, you should have saved three times your
           annual salary.
  •        At 55, you should have saved five times your salary.
  •        When you retire at age 67, you should have eight
           times your annual pay in savings.

For many, though, the “shoulds” aren’t as simple in the doing as they sound.  In fact, when Morningstar analyst Christine Benz polled the firm’s older individual investor clients, she found that many had done it the hard way, following a “Keith999” pattern rather than the common-sense Fidelity guideline: 

“In my 20s I spent, in my 30s I spent more, then in my 40s I began saving about 6% of salary, early 50’s about 12%, and the last 10 years I/we saved 20% of two salaries.  The last ten years probably represent over 50% of the total saved.” 

As Time concludes, saving early is the only true silver bullet.  And, if you’re in that magical “sweet spot”: of ages 30-45, you’ve got power today that cannot be duplicated in later years. 

The Center for Retirement Research estimates that the savings rates required for workers to achieve 80% of their preretirement income if they retire at 65, are as follows:

  •        15% for those who begin saving at age 25
  •        24% for those who start at 35
  •        41% for 45-year-olds
  •        After that? Let’s just say the percentage savings
           requirements turn daunting.

Here at Worley Erhart-Graves Financial Advisors, we’ll be focusing our blog on different generations, so that there should be helpful information that hits everyone’s “sweet-spot”. We know the “shoulds” are not simple and they’re certainly not easy.  But keeping our eyes (and yours) on the only true silver bullet is where the rewards lie – timely, consistent savings and investment.

Content was prepared by a freelance journalist on behalf of Worley Erhart-Graves Financial Advisors.