DIY retirement planning is popular…And dangerous!
Retirement planning is about more than working hard and growing a solid nest egg. Getting retirement “right” is more than investments – you need an all-encompassing plan. Confidence comes from having a comprehensive, holistic retirement plan. You need a solution that delivers:
- Consistent, secure long-term income
- Forward-thinking tax planning and mitigation
- Market downturn protection
- Inflation protection
- Funding options for healthcare and long-term care
- A plan to efficiently transfer wealth to the next generation
Discover 7 reasons why you need to stop DIY retirement planning and hire a financial advisor. A financial advisor offers a “big picture” view and can help you avoid the many pitfalls of DIY planning, including:
1. Removing the Urge to Trade on Emotions
You’ve probably become more than a little emotional when you think about your money. And when it comes to investing for retirement, listening to these emotions more often than not can end disastrously. It takes a particular type of person to be able to put aside feelings and make the right decision every time. A fiduciary financial advisor is free of any emotional attachments and is able to choose whatever action is best for your wallet.
2. Failing to Employ a Disciplined Process
Hunches and tips rarely work out in the long run, but choosing and sticking to a proven strategy does. Your financial advisor has years of investment experience to use as a guide, and will never risk your money over a gut feeling or a rumor.
3. Avoiding Rebalancing a Portfolio
Creating an investment plan in conjunction with your income plan and tax strategies takes skill and discipline. Most DIY investors are reluctant to make seemingly counter-productive portfolio adjustments throughout a 20 or 30-year retirement to meet long-term goals. Selling a well-performing asset to buy another financial instrument that is underperforming is crazy, right? Well, not if you know what you are doing. The pros know when it makes sense to take the risk.
4. Putting All Your Eggs in One Basket
The old adage, ”Only invest in what you know,” is good advice, but if you don’t have experience with several types of financial assets, your retirement plan probably isn’t diverse enough to offer you very much stability or meet all of your goals. “You don’t know what you don’t know” definitely applies here. A good financial advisor will make sure that your investment strategy works in conjunction with your income needs, tax strategy, healthcare needs, and estate planning.
5. Selling When the Market Gets Scary
The market is down for the second week in a row, and the value of your portfolio is dropping like a stone. Are you going to have the guts to stick to your investment strategy? Most DIY investors don’t and wind up not only selling their investments for a loss but missing out on opportunities in the rebound. Financial advisors take a long-term approach and act like seasoned coaches to guide you through difficult times, helping you make appropriate decisions throughout.
6. Trying to Call Tops and Bottoms
Numerous studies have shown that timing the market perfectly is nearly impossible. You have heard it a thousand times, “buy low, sell high,” but attempting to call the tops and bottoms of a volatile market can cause you to lose out on a lot of profit and damage your long-term retirement plan. A financial advisor helps remove the emotion and focus on long-term strategies that not only provide reasonable growth but also preserve and protect your assets.
7. Sleepless Nights
Do-It-Yourself Investing is stressful! Ensuring that you have covered all the bases – investment, taxes, income, risk, and healthcare – takes time and a high level of commitment. If the market is up, you are worried whether you should ride the wave as long as possible or take your profit now. But if the market is down, it is even worse. You are terrified your investments will never recover. Why do that to yourself?
Do your due diligence, hire the best financial advisor you can, and rest easy. Why make retirement planning harder than it has to be? Take your life back and build a retirement strategy you can count on.
Award-winning CPAs and CFPs, the financial advisors at Outlook Wealth Advisors, offer a unique perspective most other firms simply cannot offer. They have assisted retirees and pre-retirees manage wealth and prepare tax-friendly retirement plans over 25 years. Email us at info@outlookwealth.com or call 281-872-1515 to get started.