Q. How much should I save for retirement?
A. This is a question on many people’s minds. The question, reshaped, is how much do I need to retire or to be financially independent? In calculating how much you need to save, look at how much you spend for your standard of living. To replicate your income when employed to meet expenses, studies have shown that a 3-5 percent distribution rate provides a higher degree of asset longevity. So, at a 4 percent distribution rate, you would need $1,000,000 saved for each $40,000 of annual income.
Q. Should I invest in the market now?
A. The volatility has many investors nervous. Establishing an investment strategy that aligns your values, goals and risk tolerance to develop a diversified portfolio can help reduce the emotions of fluctuations in the markets. Understanding what you want your money to do for you is a shift from what you do to earn money. Your dreams of financial independence can be more attainable with careful planning. For example, many find using their 401(k) for systematic savings (called dollar cost averaging) is a more comfortable way to invest during volatility. They may even feel that sometimes they are getting their investments on ‘sale’ because their same contribution amount can acquire a larger number of investments when the values are reduced.
Q. Should I rollover my old 401(k)?
A. It is not uncommon to have several jobs, even careers, in the course of your working years. The excitement of new positions and professional growth can sometimes lead to several 401(k) accounts that get little attention. There are pros and cons to rolling over a 401(k) account or consolidating accounts. Please call us for a free brochure called “Leave It or Roll It.” If you have more questions, we are happy to provide further education on your choices.
Q. When should I take Social Security?
A. What appears to be a simple answer is really quite complex. It depends on whether you are married, for how long, and what other guaranteed income you have. Additionally, the ages of you and your spouse influences your choices. And, whether or not you have legacy wishes. The big unknown is how long you expect to receive benefits (life expectancy). We help our clients evaluate their options and would be happy to help you determine the best approach for your life goals.
Q. What is a fiduciary? Are all financial advisors fiduciaries?
A. A fiduciary is a person or organization that puts their client’s interests before their own. They act in good faith and trust and are bound ethically to act in the client’s best interests. They avoid conflicts of interest and will disclose any that may exist. No, not all financial advisors are fiduciaries however as a Financial Advisor with Ameriprise I am bound to these ethical fiduciary standards.
Q. How do I learn more about money issues?
A. There are dozens of books on financial topics and television programs available daily. Over the years we have discovered that people prefer to learn from a professional in an educational environment that allows for questions. That is why we offer seminars on various topics. Visit www.affinitywealthadvisor.com to learn more about our upcoming seminars and visit often to see what’s new.
Renee A. Hanson, CFP®, ChFC®, CEP®, CDFATM, CFS®, is a Private Wealth Advisor with Affinity Wealth Advisory Group, a private wealth advisory practice of Ameriprise Financial Services, Inc. in Phoenix, Arizona. She specializes in fee-based financial planning and asset management strategies and has been in practice for 27 years. To contact her visit www.affinitywealthadvisor.com or call (602) 923-9800. Her office is located at 7010 E. Chauncey Lane, Suite #200, Phoenix, AZ 85054-3115.
Illustrations are hypothetical and is not meant to represent any specific investment or imply any guaranteed rate of return.
Ameriprise Financial cannot guarantee future financial results.
Ameriprise Financial Services, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.