Do It Yourselfers Need Diversity of Input & Opinion in Retirement Planning

Perhaps 50% of the population utilizes financial planning services; others take a riskier don it yourself approach. Retirees should go beyond diversifying their assets, and allocate appropriately for their goals and ages. They may even want to seek a second opinion from a retirement planning specialists who can help them achieve portfolio sustainability by determining the clients’ goals and risk tolerance. Diversification of opinion could broaden your money understanding. Watch the interview with retirement specialist Zach Perez.

The American Automobile Association (AAA) has long been known for safety and security, and those same tenets apply to an appropriate asset allocation in retirement. Asset allocation by itself – the idea of not having all one’s financial eggs in one basket as a hedge against volatility – is not enough in later years. Deeper yet is the appropriateness of the allocation, or, how the allocation reflects the owners’ goals, age, risk tolerance and ability to live with – or recover from – sudden changes in value.

Retirement’s “AAA” is a manifestation of goals. However, many retirees have not thought about goals beyond enjoying good health, travel and not outliving their money. A retirement planning specialist can help uncover and document short and long-term objectives. The specialist will utilize a risk-tolerance test – something that perhaps only 10% of adults have completed – to gain an understanding of the clients’ comfort – or discomfort- with the potentially sudden loss of assets’ value. Additional inputs can include the clients’ age; the time until full retirement (often 2 – 4 years); and how risk reduction should organically increase with age.

With information in-hand, the specialist can craft an allocation that safely addresses overlapping or even competing goals. A desire for high returns will carry an element of risk not present in an allocation intended to support sustainability rooted in longevities stretching past 85 years. Holistically, the plan should address all of the client’s assets and the impacts of taxes and anticipated healthcare.

Transparent costs should be expected by clients to achieve an appropriate asset allocation that meets their portfolio’s needs for safety and durability. Depending on the scope of service, costs can be flat per specific service; an annual percentage of assets for ongoing management; or commission-based per transaction.

Today’s financial and medical complexities nearly demand the expertise of a specialist who can create a 30-year plan for retirees who’d prefer to put more effort into the logistics of a three-week vacation. Having an appropriate asset allocation that exceeds simple diversification can be critical to meeting the ongoing needs of retirees.

Syndicated financial columnist Steve Savant interviews top retirement specialists in their field of expertise. This segment features Zach Perez. Right in the Money is a financial talk show distributed in daily video press releases to over 280 media outlets and social media networks.