6 signs your retirement plan is in trouble
planner shares tips for avoiding a 2008-style disaster during the
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After the 2008 economic
meltdown, when the stock market fell 37 percent, veteran financial
adviser Curt Whipple met with clients from outside financial
institutions who'd lost 50 to 60 percent of their portfolio in a
"Almost no one foresaw what happened that year, and I doubt very
much that many will foresee a collapse if it happens again," says
Whipple, a certified wealth strategist, certified estate planner and
CEO of C. Curtis Financial Group.
"Regardless, there are eight
indicators that you can focus on that will help you identify whether
or not you're taking too much risk in your portfolio and if your
retirement plan is in danger."
Whipple, who recently published "Retiree Lifeline! How to Get
Government Out of Your Pocket," a retirement planning guide, reviews
the six danger signs from 2008 to watch out for in 2014.
In 2008, people couldn't believe what was happening to their
portfolios. They looked at their account every day – an exercise
in masochism – as their advisers told them either to "just hang
in there" or reminded them that the market is a long-term
investment that cyclically rises and falls. That advice led them
to stop looking at their accounts, which was as bad as looking
at them every day, as their adviser told them to just hold on.
You lost more than
15 to 20 percent of your investments' value in 2008. That
indicates you had too many risky investments. It's important to
know what level of risk you're comfortable with. Generally
speaking, the younger you are, the riskier you can be. However,
risk is also a personal decision. Make sure you and your adviser
are on the same page regarding risk tolerance. That will require
your adviser taking the time to explain your investments and how
Your broker or financial adviser
fails to call you regularly. You should get a call every
quarter from your adviser to review and discuss your account.
The only time this should not be the case is if you specifically
request to be contacted less frequently.
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If each investment you have is one or all of the
above, then your investments are not truly diversified. In
addition to those investments, you should consider
alternative investments like real estate trusts, known as
REITS, and your accounts should feature some kind of
is tied mostly to Wall Street or stocks, bonds and mutual
living in a new financial era. Bonds now have an inverse
relationship to interest rates, which are so low now that
they will invariably increase in the future. As interest
rates rise, bonds will decline in value. That's why it's a
dangerous idea to use bonds as your only alternative to a
You depend on
your bond portfolio to protect you in hard times.
Your fear may be based in
reality if you have a number of risky investments; if you
really don't understand what you are invested in; or if you
don't have a clear plan to achieve your financial
excessively about money.
Curt Whipple is the author of "Retiree Lifeline! How
to Get Government Out of Your Pocket." A certified wealth strategist
and certified estate planner, he is chief managing partner at the
C. Curtis Financial Group,
which he formed in 1986. Since then, Curtis Financial Group has
counseled and advised individuals and corporations on their
financial goals and decisions. Whipple is a nationally recognized
[Text from file received from
News and Experts]