Who’s Driving Your Retirement?

We attended and were presenters at the National Education Conference last week for NEXT Financial Group, Inc.  It was at the Loews in Lake Las Vegas and was attended by about 600 financial professionals from across the U.S. Not the normal ching and ding that most think of when they envision Las Vegas.  This conference was about 30 minutes off the Vegas strip. If the government wants us to believe things are getting better, this isn’t the place to do the interview.  The place looked broke, empty buildings, a bankrupt casino, a closed golf course and even the Ritz closed their doors.

Ever hear the expression, “things just aren’t like they used to be?” Well they really aren’t.  I (Mark) can remember growing up and spending some time at my grandmother’s house in Lincoln Park, Mich. The sounds of the ice cream man ringing the bell neighborhood to neighborhood was a normal sound. Now many parts of Detroit look like a war zone. Toledo continues its battle as Mayor Mike Bell fights to get back to the “good old days.”

The government wants us to believe that things are getting better, but are they?  Just look around, and not just in Toledo.  Internationally, countries around the world are begging for bailouts, several States and Municipalities here in the U.S. are deep in the red.  Are things getting better or is this the calm in the middle of the storm?

In our May 3 online column last week called “The Retirement GPS,” we talked about the major technology advancements that the average person can take advantage of when planning for retirement.  A GPS, if used correctly, can help a person reach a destination, better and faster than the old ways of doing it. Unfortunately, most people don’t know how to properly use this technology and too many people take a back seat to their investments and rely solely on others for getting them to where they want to go.

Imagine people plugging in a destination into their GPS and flooring it, driving as fast as the car would go.  Sure, as long as there were no police, or obstacles in front of them, and no bridges were out, the GPS would take them exactly to their destination in a hurry. In reality that wouldn’t be a smart idea, would it? Yet, in the investment world, many retirees own investments that bet the stock market is going to go up every single day. It’s like putting the pedal to the metal with their life’s savings.

Using The Retirement GPS can be a major help, but everyone still needs a good and safe driver behind the wheel. A driver that can avoid construction, knows when to put the brakes on and can avoid crashing.  A smart driver looks out the window and pays attention to the signs.  Right now, with what has been happening in the stock market in the past few weeks, the governments’ out-of-control spending, and the debt crisis overseas, it is a good idea to pay attention to the sign that says “Caution Ahead.”  Be prepared with an exit plan and know when to put the brakes on.  In terms of investing, there are several ways to do this.

Position assets in the most tax advantageous way.  Spread out the wealth in taxable, tax-deferred, and tax-free accounts. No matter what the government decides, by having separated the assets into three buckets of money, an investor will have more control over taxes by being able to decide which bucket to pull money from.

Since the market has had a nice recovery, build back up the safe accounts.  Having a few years worth of retirement income in accounts that aren’t in the stock market can help a retiree avoid crashing. We use what we call the independent income system to diversify money into four or five stages of retirement.

This makes sure that all assets our clients own have an associated purpose and we consider important time frames.

Be prepared, if the road ahead gets worse, know who is behind the wheel so you can steer clear of danger.

Got a question for The Retirement Guys?  Send your e-mails to letters@toledofreepress.com or you can reach them by calling (419) 842-0550. Securities are offered through NEXT Financial Group Inc., Member FINRA / SIPC.  The Retirement Guys are not an affiliate of NEXT Financial Group. Their office is located at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537.

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