What Can Music On The Internet Teach Us About Finances

Financial Symphony
Saturday, March 3rd

Answers to your financial questions and what can internet music teach us about investments


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

No financial center and helping you can. Harmonious financial plan and getting your portfolio in two weeks so sit back while always strike up the the financial simple it's starts now. Hello and welcome to the financial symphony thanks for tuning into the program today. Mark Killian here alongside Richard coach or rally investment advisor representative at Carolina retirement resources. Serving you here in the Charlotte metro area from his office and hunters hill North Carolina and Iraq kills South Carolina. You can reach out to Richard any town throughout the program by calling 806465996. That's 8064659. 96 get yourself on the appointment calendar commend have a consultation with Richard. And talk about your specific financial situation 80646. 5996. Richard sir how are you under great work are you hanging in there and Yahoo! open that we as some point see spring could. Speaking were teasing a strange but we're given blooming flowers blooming trees everywhere but that is true that is true we get to the seventies in the eighties and in the fifties and in the stiff and he's been in the eighties. So it's the weather can't seem to make it but smiled that's our right we know it's coming eventually or North Carolina right there exactly. Well let's dive in and get started today as we always do here on the program the start things off let's take some questions that have come in from around area. And see what Carol's got to say and more bill Carroll says. I'll be retiring later this year and I'm concerned about the market tanking I can't afford to lose my savings and I'm concerned about. Making a mistake and hurting myself. Is it possible to live well in retirement even if the market does tank when you know Carol. What you can do and probably what you should do. He's implement an income plan that protects human retirement from these market panicked especially from running out of money and retirement you know for new retirees such as yourself. Bear market early on can do permanent damage to your standard Livan. This is a risk that we call sequence of return risk and this risk is associated. With the timing of returns and if returns are negative early and retirement it can have negative consequences. As it relates to longevity risk which is a risk about living your shape and so. You know let's say you have a million dollar save for retirement and you currently 66. If you knew that there would never be a market downturn. And it you your spouse would probably lived the analysts say past nine B 91. You know you can live pretty well simply by just drawn out foreperson you're shape means every year and given yourself a little bit to raise every year for a inflation. And be reasonably assured of never running out of money but the problem is is that we don't know how long we gonna live. And you don't know how the time and when the time in his for the next bear market and so you know what of stocks. Torture retreat today from their lofty highs since 2009. And what if interest rates were spike you know which would devalue a bond portfolio significantly. You know so it's such misfortune occurs early in retirement. A retirement that could last anywhere from thirty years on. You know those 40000 dollar plus inflation withdrawals would evaporate your statements. And that that should happen then what you do. Well fortunately there are ways to cope with these uncertainties. You wanna learn what those opportunities are. And make sure that you don't run out of money in retirement so that you won't have any regrets you know in my opinion. The cure for sequence every term risk is to maintain a balanced portfolio between safe money. And we're screwed growth money you know your safe money strategy ensures income your necessities such as food housing and health care and transportation and and your wrist or growth money you know these are the long term strategies is implemented to cover discretionary expenses as well as additional income and a future. Well thank you so much for that question Carol hopefully that helps Sheldon gets you thinking in a direction and if you'd like to follow up and really talk one on one what Richard just go ahead and call 80646. 5996. Minutes 8064659. Nine the sixth question from Billy in Concord and Billy says or what are these sources of no or low risk income. But I can count on in retirement. What you know Billy you know you can probably have social security and Social Security would qualify as a know risk income scream. And it's inflation protected and despite the system's funding shortfall. It can be considered a reliable source I'm married couple. Both high iron urged both the fern benefits to age seventy. You know they're looking at pulling down anywhere from seventy to 80000 dollars a year in benefits. On the low and not an average unmarried couples could expect anywhere between thirty and 40000 dollars annually. Another source of no risk score low risk income in retirement would be a pension if you're looking to how one. In fact the percentage of workers in a private sector whose only retirement account isn't defined benefit plan is is extremely low at this time so. One other source would be maybe to consider a bomb latter you know by a collection. Treasury bonds mature and a annual dinner bowled over the next thirty years. And you can generate a pretty predictable income scream. And if you want some more peace of mind you can make those bonds inflation protected by purpose and tips so. Another short would be to consider a fixed annuities or fixed indexed annuity. You invest a specific amount into these annuities let's say at age 66. And you receive any come from the insurer for as long as you lived and some of these annuities generate income that is inflation protected. So you simply want to allocate enough of your savings to generate you're required income and then invest a balancing your savings into growth portfolios to hedge inflation. And hopefully create additional income and future I think. All of you will receive Social Security some of you we're gonna have a pension. So if you want a no risk income solution for you're parting come no need to explore. Power structure upon latter and possibly explore the addition of an duties and your retirement income plan. All right well great questions again this week here on the program we certainly appreciate all these coming in. A you can go to financial symphony dot com if you like to submit your own question that's financial symphony. Dot com or you can call Richard and just talked to him directly at 806465996. If you have. Questions about your retirement situation you'd like to get yourself on account of command for consultation. 806465996. Final one for you this week. Richard is from Michael in Charlotte and Michael says. Hey Richard I'm interested on your take on how I can ensure that I have a tax efficient retirement your thoughts would be greatly appreciated. This is a great question the best solution for tax efficient retirement. He's what you wanna do you wanna balanced. And diversified between tax deferred accounts. And tax free accounts you know we all know. That uncertainty is a huge issue for retirement savings abide balance in between Roth and traditional retirement accounts. You could better hedge against tax uncertainty. And portfolio returns. In this scenario could be enhanced by anywhere from one to 2%. By simply balancing your asset allocation to a Roth account and traditional account. You know one potential rule of thumb. For most people and for our drew a like. Would be to invest a portion of your assets equal to 20% close your age. Into traditional retirement account with the remainder. Moving into the rock accounts. So let's say you're forty years old. And you could 60%. Of your return NASA's that your traditional 41 K plan. Forty clinical raw while a six year old client. Would probably could 80% of their assets into a traditional account such give you some guidelines on how maybe to do that. They keep in mind that started in 2018 sabres and it. If you deal Roth conversion found out later on that it moves you into a higher tax bracket. He had until October 15 of the following year to re characterize that back to and higher rate. You know Roth conversions are often happen amid tax uncertainty you know when you do Roth conversion you shorten wanna communicate with your she PA. Make sure it's a good decision for you or better yet is determine how much you can convert. Without moving into that higher tax bracket and just remember if you do Roth conversions in 2018. That if you make a mistake you're not going to be able to undo that mistakes so that's something that you want to be aware of you know my guess is that congress did this to occurred more frequent conversions. Which would solve a short term revenue need but it's not clear how people respond to that's who make sure. That you have three different accounts Michael you wanna tax deferred account. You wanna tax free account. And you wanna taxable account or retiring but more importantly make sure that you fund each account properly you know from a purely financial perspective. The primary challenge of planning for a long should your retirement is preparing for the day. They're your paycheck stops and that you need to turn a lifetime of savings into an income that you cannot now live you know and retirement you wanna cover your basic lead was safe income. Take a risk with the balance of your savings and don't worry about the next crash. You don't want to outlive your statement but neither is he your objective commuter Richard persons and a cemetery. And this is why I'm really passionate about you being well prepared for retirement. And I want to extend an opportunity here right now to help you be sure that your well prepared. I'm offering complimentary financial review you if you call in the next fifteen minutes and have at least 2000 dollars saved for retirement. I'll talk to you about your retirement income needs. Where that income is gonna come from how he'll outpace inflation pay as little as possible and taxes and make sure you don't outlive your money. Now you might say I don't really have to call the next fifteen minutes. And yes it's true you could probably take care of this next month next year whatever your comfortable well but here's the deal. I think coach and people on retirement planner for a long time and I've learned that it's easy to procrastinate or get distracted. So if you don't start to process now there's a very good chance you won't do it at all. So the first coach and I'm gonna give you is to encourage you to take the first step right now for almost everybody. That's the hardest part from there it's really not a painful process so if you're ready to finally get a plan in place give us a call right. Now and that number is 80646. 5996. That's 80646. 5996. Take advantage of the opportunity for Richard future LA and get yourself on the calendar at Carolina retirement resources of 80646. 5996. This is the financial sense to me let's work on the day all the programs that. It's time for another musical connection we're we blend the worlds of music and financed together. Here's randomly show financial advisor and musician. Mark glory. We have a bronze dusts itself for another musical connection here on the financial symphonies so mark let's think about how the Internet. Completely changed the music industry both in good ways hit a bad way it's. Wow hey it's crazy I mean you think about it oh I know we talked numerous times on the show through the years and how I mean personally I know I can speak for you to I enjoyed. Opening up the album and I'm kind of excited about finals coming back you know damage to. But I loved opened up the album and when we had a double album right there was always a bug to liner notes and you can see all the lyrics to the songs they put them in there they put down who recorded one at a young who was on drums who was on base who was on guitar I loved all that stuff. On this thing that with the Internet yeah but I have to admit. I love downloading any album any song any artist I want instantly. It is. Pretty cool coal mean to say that I'm way view I like being able to hold it in my hand. Solid material I like albums even CD's I like being able to hold my hand but. The one thing that we both have to admit even though we're like old dogs learn new tricks here. One good thing is you have instant access to kind of music you want on the Internet rights movement exactly. And it's cheaper. I mean you can buy at any at a cheaper price I can get hold greatest hits album for my inbox on the Internet you know but if I went out and got that CD was I don't know how much of CDs are now 151718. Bob depends on where you are you you're paying for the packaging. Well I know that there are some good things in regards to fan interaction with the artists as well. And then the senate ethics. Artists and labels don't make so much money is used to. And you know I'm always not in favor of that 'cause I want to see those people who play the music do better. And also there's more opportunities for stealing that music in. Bootlegging stuff than. You know parody molester what was that web site Napster that got nabbed for as they absurd yeah big time government the LA in the same way the Internet changed the financial industry and and I want you to explain how that has happened widget. Yeah how are really so back in the day viewed either go to your banker you'd go to a stockbroker. Will local you'll corner office in downtown whatever town you live then. Had a single outside and you say I wanna buy X amount shares of the stock or ya wanna mutual fund to go by. Too because I wanna invest in the market now wanna do it away and and there was an usually high commissions involved there's edit and sadly to this day they're still brokers out here with high commissions. Communists changing. The industry's changing to get away from that. You know with the new malls that have recently been. Been passed where you know we were acting as fiduciary is and it's all changing but back in the day asked the oil was but now. You can do for money five trading all day long if you wanna be a day trader. And there's so many different platforms out here where you can put together you'll modeled yourself. And there is good and there's bad to all that round yeah. You know there's the good news is we can get we have the access to it and we can get information instantly on how the stock is doing we can sit there and watch it by the minute if we want to or we can sit there and get a report firm. Feel very reputable resources like Morningstar deceive the performance of a fund if we want to. But the problem is is that it's so easy for people to hit the sell button as well. Room and I would imagine that one of the things you're gonna say is that you can get lots of good information but you can also get some. Information that's not accurate and that leads all kinds of problems. Not accurate because he here fake news but that unfortunately. On the Internet there's people with agendas and so they're going to may be. Positions something a certain way for their benefit and that might be wrong information. And when it comes to buying and selling remember locally here in the local new fox affiliate here and in the city that I men. Asked to come out one day to have me interviewed for the evening news in the in the noon day news because someone several years ago. Hit a button and the Dow Jones industrial dropped 800 points instantly walked. It would end up being in a technical glitch then but we found not too long ago just recently here. Where the Dow had the worst drop in one day in history. And these computerized. Robo advisors crashed. And it just locked up. Well this is where it makes sense to have people. That are helping you. You know and this can be done economically there's ways. You know the fee structure inside of managing money has gone down through the years and it can be done economically. And I'm telling you it's priceless is like that old master card commercial it's priceless the knowledge you can get. Just by picking the brain of someone who is knowledgeable in this industry where you can make better decisions. And having someone as your quarterback. Or your coach to help you navigate all of this future volatility. Is worth this waiting goals so as good as the Internet is. Sometimes it makes more sense. To have that face to face interaction and that is possible for everyone out here listed A-Rod tell folks what they need to do to get that. Dispute at the following call 806465996. That's 806465996. Didn't get a complimentary review of your financial plan. Just call now to take advantage 806465996. Stroud played. Well it is time for in the news here on the financial symphony would return to to really. They like to grab me headlined it's making its way around the interwebs are wrong here. Local music nineteen Richard you know a lot of markets across the country have been chilling home prices on the rise some markets or even skyrocket. Do you think or may be on the verge of another housing crash like the one that kind of kicked off the trouble ten years ago he had you know were you look back. A decade ago and how the market was an epic proportions out of control and now I have a Matthew that was buying homes he got caught up in that. Euphoria and I kept warning him over and over again he could not do this but. He didn't listen of course and none he ended up losing all those homes but. No fact was that too many homes were built into many people will pay top dollar for them and then throw on top of that all the faulting more real products that were being offered. He just didn't end well you know we hit the bottom in 2012. And since then homes have appreciated significantly you know. But there is a little bit of a difference today than there was a decade ago and that these prices are not being driven by faulty mortgage products that people can afford. They're being driven by a severe lack of supply of homes for sale as well as a near record low mortgage rates I mean that's which drive in this stuff you know show there are. Many dynamics unique to today's housing market that continue to put upward pressure on home prices. You know for example you know Moline Il turned 34 last year so more moral O'Neal's. Are looking to buy homes but many can't so they have to went. And Iran can homes and that's good for investors in a real estate investors. Because you know they were here Renta because they don't meet the mortgage credit requirements that exists today a lot of cases they're just unable to save for a down payment because rents are so high. Technically the case Shiller US price index in major cities throughout US indicates that weren't another bubble but it's very difficult to know exactly. When that global commercial. I really don't know I think I would take note of the fact is short marketplaces are really Colorado recently. And I looked at home just to get a feel for what's going on and you know under 300 dollars plus per square foot for home and that's incredible. Incredibly high so some of these local markets might get a crash. Nationally I'm not too sure county your point oh is reading not too long ago that some of the higher in homes are starting to suffer some issues but. A lot of the entry level as your tenements in the millennial a lot of the entry level or for Stanley homes are definitely flying awful -- off the market pretty quickly. So very different things yet. Well that's are in the news segment here on the financial symphony with Richard who drilling 80646599. B six and remember call. Stick around there's much more from day on the program. Wherever you go there yeah. Following lurking stinking alone continuously nibbling away your hard work and. Yeah me. Or. Don't be afraid of hidden fees in your portfolio. Come in to meet with their financial maestro for review of all the fees in your current plan. Let me see if we can eliminate those pesky. Didn't see. I'm. Come visit with your financial maestro and Richardson to LE sipping the Charlotte metro area. Call 806 point 65996806465996. The you're listening to the financial company that show that makes your your financial plan at them the perfect. This wave back here with us on the financial symphony with Richard could you really investment advisor representative Mac Carolina retirement resources. Serving is here in the Charlotte metro area from his office and hunters hill North Carolina and Rock Hill South Carolina. You can reach out to Richard 806465996. That's 806465996. To get yourself on the calendar. For a no cost or obligation consultation with the Richard. Here on the financial symphony we try to cover a lot of topics each and every week in this week seems to be able centric and focused around questions from the listeners we have our listeners segment earlier. On the program and their rich are Hollywood talk about for a one case because lately we've been getting a lot of frequently asked questions if you will. From the listeners so I thought would do kind of a 401K SAQ. Section here on the program so here's some of the top ones that people have been writing in about when it comes to their 401 case. The first one is the free advice or the advice for a low fee that some companies offer to their employees is this a good idea to take advantage or not. Well you know until 2011. When the Department of Labor released its participants investment advice rule. You know plans to be sure you were not permitted to provide individual investment advice to participants. But with the final rule the last promise of the pension protection act 2006 was fulfilled. But even so we continue to see confusion regarding who is and who isn't providing purchased an investment advice. And both clients and their service providers don't understand what qualifies as investment advice I don't know about. Other fighters but I have been doing this for fifteen years or so and it's amazing to me that you know I always ask people if they have someone that's advising them. On their 401K allocation and and they always say no so. You know most people are just under the assumption that they have been received an individual investment advice. But the individual that they've been getting their advice from is simply a sales rep. And you know he basically looks at your agent says okay your sixty years old so you wanna put this much in bonds and that much in stocks and that's not necessarily be killed investment advice. Again my experience is that most people who have 401 k.s don't receive any advice whatsoever. But if your employer does provide or. Offer investment advice. The question is should you trust that advice. But you gotta be careful because the on the wonder person that's given you advice might be affiliated. With the mutual fund company let's say. And so that advice may be conflicted coroner ruled as your company offers investment advice those investment recommendations must be made. By an unbiased computer program advisory fees must not be linked to specific investments. And the advisor sources of income must be transparent so. If that's the case in the advisory is a fiduciary. You know you should take advantage of that opportunity but you wanna do that in private. You know that meeting should be on an individual basis anonymous groups that end and the advice you receive should be independent of the administrator of the 41 okay. You know this way conflicts of interest can be afforded. What certainly good points there to make on that because I was off them wondering that myself. If it's maybe we've just kind of computer generated in which case I think I'd rather talk with a person. Who I can start to have a conversation with and kind of you know face to face one on one type of thing but that's one of the first questions we've had a we certainly appreciate your. Take on that as well what about the 401K loans Richard. I'll people been writing in is that a good idea to take a loan against your 401K or is it not a good idea. Now most advisors would say you should never take out a 41 K loan but in certain circumstances it may be your only option in a crisis. In almost 41 K plan participants have the right to borrow as much as 50% of their account balance. I think there's a maximum up to about 50000 that you can borrow. Without paying taxes on the song and you would go to a four day 10%. Penalty for early with girls. And borrowers I think they have a pew five years to pay the loans back. But that varies from plan a plan. You know for me I think you should never borrow from your 41 K plan unless it's the only option left. You know keep in mind that it's not alone but really you would crawl and regardless I think have a loan provision. In the plant is probably a good thing you know for those untold emergencies that could occur. And some companies claim that by having those loan provisions available to their participants. That it increases. The rates that people participate in the plan. You know there's no question that you should be saving as much as you can and then leave those statements is untouched as possible to appreciate for the future. You know the quality of your retirement. Shortly depends on that but if you have no access to credit and and then axis is only a high rates. You know the 41 K loan provision may not be such a bad idea in your situation but if you do. The money you borrowed won't earn any return you know lone wolf for shooters so investments in the account at forgo any appreciation in the ass says. And you'll likely miss any upside until the loan is repaid. And when you do put the money back he may have to invest that new and potentially higher prices so. You know many of you already have inadequate savings in your retirement accounts and if you borrow from those accounts you'll likely face a shortfall down the road remember. The worst case scenario for anyone is reaching retirement with no money so borrowing from your 401K should be an option of last resort and for the right reasons. It's been listening to the financial symphony with Richard could surely we're talking about 0401 K frequently asked questions that was up 41 K loans. And certainly before you take any action with anything I always make sure you check for the qualified professional. Like Richard which really who is an investment advisor representative at Carolina retirement resources 80646. 5996. We're gonna take out one more here Richard and we'll take a short break but up 401K rollovers. Do they make sense for folks and when do they not make sense. We don't as a anything related to invest in mark the situation is not always plain and simple for everyone. There are many things to take into consideration when you're looking at a potential for once they roll over. While I would not personally choose to stay within all 41 K plan. You know it might be a viable option for some that might even mean that you leave it with your former plan. If they have a solid stable offerings and they charge low fees. The key is to look at how your plan for retirement as a whole and what role your old 41 K plans and that plan. Want to determine NAFTA rest is pretty simple. You know I think the predominant reason most people would consider a role in their 41 K money over to an irate. Is that they would gain access to more investment options and have more control over your account. Although a roll over isn't always the right move it's the best move in many cases for example. You know many 401 k.s are hampered by under performance funds and and high cost. And even low cost plans may charge former employees higher administrative fees if they choose to keep the 41 K would that company. You know companies are required to disclose the fees they take out. Of your counsel make sure. Then you turn around a review that quarterly statements for details and if you change jobs frequently. That means you might have multiple 41 k's out there you know leaving your plan behind could result in a Misch massive overlap and funds. That may not suit your age and it may not be you know appropriate further risk that you are willing to take. In that case it might make sense to consolidate all those old for 1 k.'s central and higher rate and finally most 401K plans. Have a solid lineup of stock funds for growth but they often are weak when it comes to fixed income options. And actually get close to retirement you'll probably want to shift to a less aggressive mix of investments. And focus more on the preservation of assets and rolling your money into an artery will provide you with a smorgasbord of options to achieve their goals. You know when you leave your employer for retirement you have four options for your 401K. You can keep your 401K with your former employer. You can roll the assets into an IRA or Roth IRA you can consolidate your 401K into your new employer plan or you can simply cash and out. The key point to remember about all these roll overs. Is that each type has its own rules so whatever you decide it's important to be sure that you aren't compliance or you can benefit from the tax advantages. And not find yourself and penalties. Soviets left your job you have 41 K with a previous employer and your at least 59 and a half years of age I'd like to offer you the opportunity to come in for complete financial review. And all offered this review for free if you have at least 200000 more safer retirement. I'm really passionate about making sure that my clients have all their bases covered near retirement plan and feel for instance how much risk you take in your portfolio. And is that amount of risk appropriate for your agent for the amount of return mature actually get in. You know what about the tax implications on your savings is there a way to save money in taxes down the road bike plan and proactively today. Do you have an income plan in place to be sure that you aren't in danger of running out of money if you end up living thirty more years in retirement. Do you have a plan to address inflation and in future decades as the cost of everything continues to rise. Obviously there's a lot we need to discuss and we found that most people just haven't planned for early enough to address all these issues. Again this review is complimentary if you have at least to earth now more safer retirement. But the calendar does Philip quickly should go ahead and give us a call right now that we could be sure to get a spot reserved for you. And that number is 8064615996. That's 806465996. If you can't call right this minute certainly right that number down and call as soon as he can press the nation will always get the better of us. To take advantage of this great offer to take advantage and get this thing complementary review from Richard which really investment advisor representative. Thank Carolina retirement resources get on the calendar in reserve your spot today. 8064615996. This is the financial symphony coming up a little later in the show. Richard and I will return and talk more about 0401 K frequently asked questions don't go anywhere. It's time for a fireside chats. As we get to know you're local financial symphony maestro. Well it's getting to know you time here on the financial symphony with Richard through drilling. We would love to have Julian greasing met in the background but unfortunately the mouse would want royalties. And he's rich enough already sell Coca move on exist ask Richard his question of the week. He's a this is a random off the wall question and it's just steps away from the financial chatter for a moment or two. Just to get to know him a little bit better outside the financial. Dancer if you will sir Richard here's a question it's a pretty good when and listeners you should ask yourself this question as well. If you had to be stuck at one age or error in your life what age you wouldn't be forever by the way yet to be stuck there forever I would see age forty. Forty okay. You know your. You know at forty I was old enough to know better and young enough to do whatever I please you know so and also have the financial wherewithal to do afforded so. Yeah I think forty was a great time for me I kind of settled down and have my act together and was in good shape you know healthy no health related illnesses. I was actively mountain bike and at that time skiing and snowmobile and a lot of fun stuff and so I would I think age forty will be a perfect age to continue to do so. Could less interest they as a my daughter was about sixteen when I was forty so I'll probably skip that one could I think that the effect at. I might go with 45 those she's out of the house my wife and Larry of be measures of 46 miles on the back of the year but. Is that are twelve I don't know twelve was always agree as a great year for so many people because your. You're not quite a little kid anymore but you're not a big kid you know you're right an area where he can still play in just enjoy life and pretty carefree at twelve I think for the most part. Yeah I thought about then I thought about the younger years and we've there're some really exciting times it's. No age forty have thought about and that was prime time for me. They get plus certainly agree with that that's a good answer ask yourself that out there radio land and he had to be stuff if one needs for everybody to my feet. That's are getting you know you would return to really we've got much worse come on programs. Stick around we'll get back to. You're listening to the financial symphony striking the right court. In your financial plan. Floor cruising down the homestretch here today on the financial symphony with Richard culturally investment advisor representative. As Carolina retirement resources. Serving you here in the Charlotte metro area he's got an office in hunter's bill North Carolina. And one in Rock Hill South Carolina and is very convenient to reach out to get a hold of and come in for a consultation a complimentary consultation. Is source to be had by calling 8064659. And 96. At 806465996. Call that number get yourself on the calendar. Richard we were talking about 401K. Frequently asked questions that we've been getting from listeners. Quite a bit here lately recovered several good topics today so far. From the free advice that you might find in the company plans to 401 k.s 241 K rollovers. Let's talk a little bit now about target date funds I think for a lot of people these are kind of an auto pilot deal you pick your target date he said it and kind of forget it. Is this a good option for most people. Hey you know target date funds offer what appears to be that one stop shop and it set it and forget it invest an idea. And for most of you who don't receive advice from a for a future that sounds spewing. What you do is you select a fund designed hopefully to have the right combination of assets based on when you plan to retire or your target date. And you choose the funds and then the investment managers do all the work for you they take care of the investment selections asset allocation and rebalancing. And target date funds are usually a portfolio of mutual funds whose mix of securities like stocks. Bonds and cash supposedly become more conservatives your target date for retirement approaches. For those of you that don't trust long term market performance. And instead agonize over short term losses. You know target date fund may be your best option you know many of you. Park your retirement contributions in cash and bonds and Europe under way to end your use of stocks and stock mutual funds and you do it. Out of fear of short term market volatility and a lack of understanding on how to invest. You know the problem is that Parker Pearson a missing cash and bonds. It deprives you of growth over time that stocks and stock funds offer. You know this is a problem especially for young investors who collusion years or even decades of compound growth. As a result their retirement you end up with a message that could be hundreds of thousands of dollars smaller than it could have been. On the other hand target date funds are perceived as relatively safe. But they can be more aggressive than you'd expect as we learn Dora the 2008 financial crisis as many of you who were invested in 2010 target funds. Were surprised to suffered serious losses just two years before retirement. You know the stock market took a big hit but your holdings in the 2010 funds Marie should have shifted almost completely to say bonds. It turns out that many were far more aggressively investing in stocks. Then they thought they were so that suitability of target date funds from masses of investors relies upon a single simple assumption. That's fixed income investments aren't backstage. They're not sore in my opinion if you're within five years of retirement I would recommend investment target date funds. All right well so it's a good information to have in a Richard I also heard and correct me if I'm wrong here that sometimes those can carry higher fees as well as that the case absolutely because that would be accuses page tend to have more. Stocks than they do bonds anytime you invest in stocks you're gonna have higher fees grow to two bombs took up. I lower talking about a 401K frequently asked questions really a lot of good ones that have been sent in by listeners and of course that was target date funds we were discussing when Richard foot drilling. What about the contribution amounts a lot of folks kind of teeter back and forth on. Do I just put enough in to get the company match or do I'm you know Max out as much as I possibly can't you know what's the scenario that you would advise on that. Well you know I've always been one of those guys were just because you can do something doesn't mean you should do it. So you know even so you should always contribute enough to Max out at company match and a 100%. A 100% greater returns nothing to sneeze at. But dependent on your financial situation Macs now your contributions to your 401K it just may not make sense. So listen where complete comprehensive financial review makes sense you wanna know. Can I do it should I do it when should I do it. Most of us we just naturally think that couldn't extra money aside for retirement is the best policy. The more the merrier right well not so fast it's important to look at the big picture and make sure you're covered in other areas as well for example. Do you have high interest credit card debt. If you do pay off their debt as soon as possible. You know how do you build up an emergency fund and a taxable account with three to six months worth living expenses if not make that a priority. Do you have all your legal documents establish these are some things you should consider and haven't placed before you consider Max and out your 41 okay. And you may want a fun other counts before Max now you're throwing OK and there are other investment options to consider as well you know deciding where to invest money. Beyond the amount required to meet your company's Mac you know that's a very important consideration you know for example. You wanna create a balance between pre tax havens and after tax havens. You know because that will help you to manager tax liability retirements so much better. So starter Roth IRA is a good idea you know with Roth accounts contributions are made after taxes but retirement distributions are tax free. And you'll have a broader assortment of investments to choose from then you wouldn't for one case such as exchange traded funds so. If you're in a place financially where you can Max out your 401K. And your Roth ire ray without jeopardizing other goals. Then sure go ahead do it so when it counts of the contribution amount obviously you know and really anything that we've talked about here on the part of an a lot of it comes down to. What's to be the right scenario for you everybody's situation is different and it's always a good idea. To talk with an investment advisor representative like Richard which are really at Carolina retirement resources 806465996. If you have questions about the 401 k.s and you'd like to talk with Richard doesn't have to be just about 41 K is it just happens to be our topic today but. Certainly if you have questions about your retirement situation give him a call 80646. 5996. Our final one here Richard this week on the program is. The Ross vs traditional a lot of people wind up sending in and saying boy Arab Wasilla taken more advantage of the Roth. Sooner if you have a Roth option in your 401K account should we be taking advantage of this you know or not app. Saloon league you should be taken advantage if they you know both traditional and Roth 41 K. Have a place in your retirement nest day and indeed choose between them he should choose both. You know the difference between these 41 K plans. Are similar to differences between regular and Roth are rays and that is the timing of tax divisional with a 41 K. Roth your pay taxes upfront and no words you contribute to your retirement account with money from your paycheck after has already been taxed. Once in the account your money growth tax deferred debt retirement qualified were droves come out tax for. By contrast. Contributions to your traditional 41 case or made it with pretax dollars the money is allowed to grow tax deferred but when it comes out. It's taxable as ordinary income annual contribution limits for both types of accounts or 181500. In 2008 team. Plus 6000 more if you're over fifty so if you're an employee. That earns a significant amount of them come 20300000. Dollars a year. Previously you had no way of getting money into Roth IRA but once is 41 K rock became available to you. You now can put up to 24000 dollars if you Rhode age fifty into that rock fire racial yeah I like these 41 K Iraq for a number different reasons you know each type of 41 K. Can provide a path to a safe and secure retirement but there are different considerations take into account. The best case scenario and retirement is to have a taxable account for tax free account and a tax deferred account. And it's important it's very important to accumulate the right amount of money in each of these three accounts you know. Today's pre retirees are retirees are faced with endless uncertainty. Like what's gonna happen with the tax code. Health care Social Security. But removing some uncertainty surrounding retirement is an obtainable goal given the current environment immediate researchers economics and others. You know their rays and red flag they're calling on many of you to carefully examine your retirement plans you know. It's my belief. That you deserve to secure independent retirement and that's why I offer this free consultation tour radio listeners to help keep them on that path. If you call the next fifteen minutes and have at least 2000 dollars saved for retirement I'll offer you this free consultation and help you determine how prepared you are to handle retirement pitfalls. Like inflation. Health emergencies stock market volatility and taxation. You know you look really really hard for your money. So all worked just as hard to help you protecting grow it. There are a wide variety of cool the services available in the financial world. I'll show you how to harness those cool and services to create a plan that's tailored just for you. And I'll show you how to achieve a lifetime of security thanks to a lifetime of income. So let's get to work now for the you can get that fact based approach that you deserve. And get better answers to your financial challenges and objectives give us a call the next fifteen minutes and work together to get you on their road to financial security and independence. And that number is 806465996. 8064659. And 96. The on the calendar with investment advisor representative Richard culturally at Carolina retirement resources again 80646. 5996. Last that Richard can do for you but none of it if he doesn't get the chance to know you've and that's where you command to grab that cell phone take the actually get on the counter today 80646. 5996. You've been listening to the financial symphony. We certainly appreciate your time today and Richard as always I appreciate your time and there was no thank you mark we'll do it all again next week right here on the financial symphony. For more from Richard culturally at Carolina retirement re. Sources of information is for illustrated purposes only. And does not constitute tax investment or legal advice. Always consult with a qualified investment legal or tax professional before taking any action investment advisory services offered through Brookstone capital management LL CBC him. A registered investment advisor. BCM and Carolina retirement resources are independent of each other.