ROGERS, AR – 23 Mar, 2016 – According to Pew Research, Baby Boomers are streaming into retirement at a rate of 10,000 per day, and many of them are financially unprepared as you might expect. Financial professionals who are licensed to sell financial products and services to pre-retirees don’t always take priority in honestly informing their clients about their options.
The attitude that an educated consumer is the best customer is not the attitude of all investment advisors, and pre-retirees seem to be the ones who are hit hardest—partly because many may not as market savvy as long-time investors, and partly because the unique financial challenges of today’s economic landscape could be working against them.
Empowering the country’s aging population begins with informing them, according to Tony Hansmann, President of Guardian Financial in Rogers, Arkansas.
“I’m tired of Wall Street, it’s like a David and Goliath story,” he says. “What we’ve found is that Wall Street really pushes and wants people to speculate and gamble with their money, and we want to pick up the slingshot of justice against this giant. We teach just the opposite of what Wall Street pushes—we want to help people manage their money efficiently and with as much market risk exposure as they feel comfortable with.”
Today’s aging population already faces a stacked deck. The Social Security Administration advises that Social Security income should account for no more than 40 percent of a retiree’s monthly income. But according to a recent AARP report, 51 percent of surveyed Boomers are expected to rely on Social Security for 41 percent to 100 percent of their monthly household income. While payments from Social Security and Supplemental Security Income (SSI) have played a critical role in enhancing economic security and reducing poverty rates among people ages 65 and older, many older adults live on limited incomes and have modest savings—and these are the people most susceptible to investment cons.
Three things that an investor consumer planning for retirement should avoid are:
• The con man making lofty promises about guaranteed returns on investments should raise suspicion. All investments are based on risk, and there are never any guarantees, according to the National Foundation for Credit Counseling.
• The prognosticator, a “fortune teller” who pretends to be able to predict the future when it comes to market volatility. There is no crystal ball that guarantees any investment is safe.
• The guru, the celebrity money manager who’s following was legendary in past years. Nobody can predict who is going to be the next hot money manager, and there is no correlation between the stock picker today and his ability to be able to do it tomorrow.
When people are stressed about their retirement income status, it’s easy to be lured by the promises of so-called “experts” on Wall Street guaranteeing investment income streams. Many who are struggling develop a habit of getting sidetracked when they’re walking through the grocery line, or reading newsletters and emails about the “five star” money managers and their investment tips. They think to themselves that this is someone whose investment strategy is one to follow, but they don’t realize that these are predatory tactics employed to attract individuals who don’t have an understanding of how the stock market really works, and the results of following such strategies can be devastating.
“We believe in coaching retirees,” Hansmann says. “We want to coach and educate the client so that they are better able to avoid the con man, avoid the prognosticator, and avoid the guru,”
“The myth that the savvy investment manager is always going to be a five star fund picker is as real as the Easter bunny,” he says. “Our philosophy is, we don’t just manage portfolios, we manage people’s behavior—we work with portfolios that have people problems.”
According to TIAA-CREF’s “Ready to Retire Survey,” 52 percent of pre-retirees say they wish they had started saving for the future sooner, and many survey participants say they wish they had made smarter financial decisions earlier in their career.
Still, it is never too late to plan for retirement. As people move closer to collecting their last paycheck, they become more likely to consult a financial advisor for help planning their income stream during the golden years. Choosing a financial advisor who will understand each individual’s unique needs begins with looking for an advisor who is a licensed fiduciary, which means they hold a legal and ethical responsibility to act in their clients’ best interests.
A fiduciary can advise pre-retirees on the best ways to make retirement savings last, reduce or eliminate tax burdens in retirement, and other options, including the use of insurance products such as annuities, which can help to maintain an income stream that will last the rest of their lives.
In addition to adjusting to life without income from full-time employment, pre-retirees may also want to take into account the possibility of having long-term care needs and expenses in the future. A sudden hospitalization or an extended stay can dismantle even the best-laid retirement plans with one stay in a rehabilitation facility or nursing home.
The key to retiring with confidence begins with a solid financial education.
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Company Name: Guardian Financial, Inc.
Contact Person: Tony Coach Tony Hansmann, President
Country: United States