What Financial Professionals See…

What Financial Professionals See…
16 Nov 2016

Financial professionals are not immune to making retirement mistakes. Occasionally their biases and experiences (and egos) can trickle over to the advice they give. We are all, at the end of the day, human.  However, in the context of what we see, here are the top 5 retirement mistakes financial professionals see from their clients:

1) Keeping your head in the sand

  • Denial (not the river in Egypt) can be a prominent obstacle. Not making a decision to focus on your retirement is actually a decision in of itself, just not a good one. The sooner you deal with the truth the better off you will be….

2) Being too optimistic-or pessimistic

  • Being overconfident and over fearful are both attributes of investors who can perform poorly. Not only poor returns on investments are possible but the unneeded stress created can make saving for retirement unbearable.

3) Poor diversification

  • As my Grandma used to say, “Don’t put all your eggs in one basket!’ Sounds pretty basic but you would not believe how many people we see with horrendous diversification or worse yet big bets on company stock in their 401K’s.  “Own a little of everything forever” one great investor said.

4) Forgetting about taxes

  • Remember that 401K balance you have is not all yours! Uncle Sam owns anywhere from 10%-30% depending on your retirement tax bracket

5) Assume you will be able to work for a long time.

  • A 2014 Gallop Poll found that working Americans expect to retire at age 66, but found the average age of retirees to be 62. Sooner than they expected. Health, layoffs and other issues seem to force people’s hands.

 

Look out for yourself and start as soon as you can! Good luck! Jeff

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Jeffrey Johnston

Jeffrey is originally from Solon, Iowa. He currently resides in Swisher, Iowa with his wife, Prudence, and his three children, Seth, Ian, and Roman. He graduated from the University of Northern Iowa in 1989, where he majored in Finance and Investments. He has 24 years of experience in the investment and estate planning business. He is currently the President of “Premier Investments of Iowa, Inc.” Jeffrey’s main focus is Estate and Investment Planning for Senior Citizens and Pre Retirees. Jeffrey became a Chartered Financial Consultant (ChFC) in 2001. He is the author of many articles on industry related topics and he is a frequent seminar presenter. He is a Board Member TRIAD Linn County Seniors Against Crime, and he is also a past Board Member of the Heritage Area Agency on Aging Task Force. He is a member of CEO Roundtable in Cedar Rapids, a Daybreak Rotary Member, and a member of the Cedar Rapids Estate Planning Council. In March of 2009, Jeffrey became the host of the Premier Investments of Iowa Financial Hour which airs every Tuesday Evening from 6PM -7PM, on WMT 600 AM Radio. In his free time he enjoys golf, fishing, scuba diving, traveling, and coaching son’s basketball teams.