Posted By: CFP&WM On: Feb 22nd, 2010 In: In the news

Senior Spectrum July 7, 2009

Your Money Matters
Tips for a More Successful Retirement
By Michael Chamberlain, CFP

At a recent meeting of retirees, a presentation of “The 10 biggest retirement planning mistakes” was given. There were many questions and much discussion. Everyone left having a few pearls of wisdom to take home.

When all the others were gone, a retired teacher approached me and said, “Mike, I learned a lot, but having been a teacher for many years, you might want to consider dwelling on the positive, not the negative.”

In that spirit of accentuating the positive, here are some tips for a more successful retirement rather than mistakes to avoid:

Have Goals
Tasks you wish to accomplish, places you want to go, people you wish to help — goals are a list of things you plan to do. There can be short-term and long-term goals, larger goals as well smaller ones. The chances of reaching your goals are much greater when they are written down and have a timeframe attached to them, as well as the expected financial cost and where the funds will come from. For instance, I will complete Spanish 1 at the community college by next June with a grade of B or better. And the fees of $250 will come from the interest on my CD.

Make Timely Decisions (Don’t Procrastinate)
Some retirees are afraid of making wrong decisions, and based on that fear, do not make decisions at all. A common comment is, “I’ll think about it.” If you have accurate information and understand the circumstances, you have all the knowledge necessary to make an informed decision. Getting accurate information can be difficult, particularly so in a sales situation. Do not be afraid to get a second opinion from someone who is not trying to sell you something. Ask family members or a trusted advisor, such as your tax preparer, attorney or financial planner, depending on the decision at hand.

Do Not Put All Your Eggs in One Basket
Your investments should be diversified. Having all your assets in CDs may not yield enough return to meet your needs. Having all your investments in stock (or mutual funds invested in stock) is much too risky. The correct asset allocation for you and your situation should be based on your risk tolerance (a mental state), your risk capacity (a financial state) and your goals, including your timeframe. Determining the correct allocation is sometimes best accomplished with professional help.

Good Debt/Bad Debt
Not all debt is created equal. Some interest, such as a home mortgage, is tax-deductible and would be much more preferred than the interest on an auto loan. Credit card debt is the worst type due to its non-deductibility and very high interest rates. It should be avoided like the plague.

Mitigate Your Risks
In dealing with risk, your options are to avoid the risk, transfer the risk to an insurance company or retain the risk and pay the price should the dread event occur. These three options exist for all risks including; health, auto, home, disability and long-term care. Unfortunately some people have too much insurance while others do not have enough and most are paying more premium than they should for the insurance they have. Everyone is different and your risk mitigation program should reflect your unique situation.

Proper Estate Planning Documents
All retirees should have the proper estate planning documents that designate who will make health care decisions or control their finances when the time comes. It is much easier to address this ahead of time rather than after an event, such as stroke, Alzheimer’s disease or other incapacitating affliction. If you own real estate, a living trust may be a good way of making sure your assets go to whomever you choose upon your passing. Always consult with an estate planning attorney for these matters.

Ask for Help if Needed.
Financial planning, insurance, investments, taxes and retirement planning are complicated subjects. Most retirees learn about these subjects through the “school of hard knocks.” It is the age of specialization. We go to the doctor for a checkup on our health, we get car tune-ups at the garage, the gardener tends our garden, and for financial advice, there is the financial planner.

To identify the areas where you may need help, complete a “Financial Satisfaction Survey.” It’s free and can be very revealing. Go to the Web site below and download the survey, or call (800) 347-1340, and it will be mailed to you. There is one survey for those who are retired and a different one for those not yet retired.

Michael Chamberlain is a Calif. Registered Investment Advisor. Send your questions to him at or call (800) 347-1340

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