What is Important For Your Successful Retirement?
Practical Financial Planning
Almost any time you set out to do something important, you set a plan if you hope to achieve your desired results. Why should planning for your financial future be any different? A plan does not mean that everything is going to go the way you expect, but it sets you on a defined path for making decisions now and down the road. This is why working with a Financial Advisor to develop a plan is so important. If you don’t have a plan, what are you going to do when the unexpected (good or bad) happens?
As your Financial Planner, Larsen Financial Management works hard to develop practical plans to help you decide where you want to be and what methods you want to use to try to get there. The words “practical” and “actionable” really cannot be stressed enough here. We have found that one-size-fits-all financial plans offered by many Financial Advisory companies can be tough for people to put in place. If you are not the type that likes to read long reports with detailed numbers and projections, you may know what we are talking about.
This is why we use adapted methods for different clients. If, in fact, you do like to see detailed projections and probabilities broken down into charts and graphs with lots of explanation, we will go through those with you. If, on the other hand, you are a “meat and potatoes” type and like things as concise as possible, we have tools to bring all factors into focus to help you consider your options and decide on a plan of action.
Managing Investment Risk
Once you have determined your goals, designed a plan to reach them, and begun putting away the necessary amount of money, it is time to make your savings work for you. Now more than ever, it is important to seek opportunity while keeping a close eye on risk and preservation of capital.
As many people have learned over the past five years, it can be very hard to recover from a large draw-down in account value. In truth, recovering from a loss requires positive returns in excess of whatever percentage was lost. This makes it that much more important to monitor accounts and set rules for limiting losses. While we don’t guarantee anything, we consider it an important part of our role to follow rules which attempt to limit losses in our client accounts.
It is often necessary to think outside the box to work towards our clients’ goals. Our investment philosophy is centered around using whatever financial tools and strategies we have at our disposal to seek the best results. With regards to portfolio management, Our investment strategy for managing risk follows rules, allows for offense and defense, and is designed to be nimble and adaptive to changing market conditions.
Saving as Much as Possible
Whether you have a plan or not, one thing will be true for most Americans hoping to retire. Save as much as you can, in every way possible. This is a combination of living within your means, making smart spending decisions, and saving before spending. You don’t have to live a boring, vacation-less life, you just have to live a good one wisely and put away whatever you can.
Different studies come up with different numbers, but the percentage of Americans who have saved nothing or far too little for retirement is staggering. Especially with the economic hardships of the past five years, many families, individuals, and business owners have found it difficult to save, if not already dipping into existing savings. For this reason, it’s important that saving as much money as possible be a part of your plan. Most likely it is absolutely necessary for reaching your goals, so if it is part of your plan your chances will be improved.
Often, people rely on projections of growth more or less based on historical behavior of the financial markets. While not guaranteed, some of those projections for necessary saving rates assume a return rate of a certain percentage. Depending on the portfolio mix, some planners will assume a 6, 8, or 10% average return for planning purposes. For your best interest, we plan based on relatively conservative rates of growth even though we hope to earn more. You don’t want to arrive at retirement age only to realize that you should have saved more, and we want to help you reduce the probability of that as much as possible.