Should You Use a Retirement planner?
July 9, 2008 by Jean Murray
To continue my interview with Bill Losey, about National Retirement Planning Month:
Q: Bill, you mentioned in our last discussion about emotion in making retirement decisions. I have a financial background and I always thought I was making un-emotional decisions, but after reading Retire in a Weekend I realized I was letting emotion rule me. What are your thoughts on that?
A: We humans are emotional beings. Most of our decisions are based on emotion, even when we think we are being rational. (We kind of think we’re Mr. Spock, but we’re not? Exactly.) That’s the true value of hiring a third party objective observer. This person can help you develop a plan and strategy, ask questions like, “Why do you want to do this?” and help you think about goals and priorities. And we make you write it all down, so when you want to do something later, we can say, “Well, you said your goal was X; how does this new idea fit with that?”
Decisions we make about money come from our upbringing and family. Here is a quick example: Many women I talk to who are in their 50’s and are widowed or divorced have “bag lady” syndrome. They have nice portfolios but they are afraid to take out any money and they deprive themselves, because they are afraid of being “bag ladies.” (I know exactly what you mean, Bill! I have a good friend with whom I have a standing joke about ending up as a “bag lady!) As an advisor, I remove the emotion from the equation and give my clients the approval to do what they want to do or keep them from doing something they really don’t want to do, based on their original plan.
Q: So can baby boomers do their own retirement planning? Does everyone need to pay a financial planner?
A: Sure you can do it yourself.
Here are some tips if you want to do your own retirement planning:
1.Create that written strategy, with goals and specific objectives.
2.Remember the emotional factor, and stick to your plan.
3.Recognize that “I can’t guarantee squat.” Plan for things to change.
4.Recognize that a “set it and forget it” strategy doesn’t work. You will need to revisit your portfolio periodically.
5.Read financial magazines and newspapers, but take their recommendations with a grain of salt. The funds they recommend as “best” are often advertisers. And by the time the magazine goes to print, the fund may not be doing as well as it was months and months ago.
When the Internet started booming, people thought it would be the end of the financial planning business. On the contrary, what’s happened is that people are bombarded with so much financial advice that they don’t know what to do or who to believe. Today, financial planners are more in demand than ever. It all comes down to your comfort level with doing it yourself.
If you go to the National Retirement Planning Month website, you can get a free copy of Bill’s book, Retire In a Weekend, and have an opportunity to win a daily drawing for a lottery ticket…and more!
photo courtesy Bill Losey