What Can We Learn From Background Music

Financial Symphony
Saturday, August 11th
Answers to your financial and retirement questions.

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

The financial center and harmonious financial plan and getting your portfolio in two weeks so sit back slowly strike at 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 future 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 80646. 5996. That's 806465996. Get yourself on the appointment calendar commend have a consultation with the Richard. And talk about your specific financial situation 80646. 5996. Richard sir how are you under a great mark carrier hanging in there and 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 in 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 what you know Carol. What you can do and probably what you should do. Is 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 on 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 shaven so. You know let's say you have a million dollars saved for retirement and you parity 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 are simply by just drawn out foreperson your savings every year and given yourself a little bit raise every year. For a inflation. And be regionally or short of never running out of money but the problem is is that we don't know how long you're gonna live. And you don't know how the time and when the time in his for the next bear market 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 there 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 first sequence every term risk is to maintain a balanced portfolio between safe money. And we're score growth money you know your safe money strategies shores 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 in the 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 the sources of no or low risk income. That I can count on in retirement. Well you know Billy you know you can probably a 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 higher earned urged both different 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 lucky to have one. In fact the percentage of workers in the private sector whose only retirement account as a defined benefit plan is is extremely low at this time so. One other source would be maybe to consider a bong water 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 income from the insurer for as long as you live 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 in the future so 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 your required income. No need to explore how to structural bomb louder and possibly explore the addition of annuities 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 and 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 insure 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. Is what you wanna do you want a 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 and by a 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 Roth accounts so let's say you're forty years old. And you could 60%. Of your return Manassas insurer traditional 41 K plan. Forty clinical raw while 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 this started in 2018 savers and of. If you deal Roth conversion found out later on that it moved you would to a higher tax bracket. He had until October 15 of the following year to re characterize that back to and higher rate. Don't Roth conversions 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 encourage more frequent conversions. Which would solve a short term revenue need but it's not clear how people will respond to that 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 of retirement 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. That your paycheck stops and that you need to turn a lifetime of savings into an income that you cannot now live you know in retirement you wanna cover your basic needs 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 200000 dollars saved for retirement. I'll talk to you about your retirement income needs. Where that income is gonna come from how you 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 with but here's the deal. I think coalition 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 from Richard future LA and get yourself on the calendar at Carolina retirement resources and 80646. 5996. Visit the financial symphony but sport come today on the programs that. Well it is time for in the news here on the financial symphony was Richardson to really. We like to grab media headlined it's making its way around him who wins or wrong here. Local news good night and Richard you know a lot of markets across the country have been chilling home prices on the rise some market three would 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 here 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 and nephew that was buying homes he got caught up in the that. Euphoria and I kept warning him over and over again he could not do this but. He didn't listen of course and non he ended up losing all those homes but. He'll 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 fault he more or 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 the difference today than there was a decade ago when 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 don't millennial 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 once or shall high. Technically the case Shiller US price index a major cities throughout the 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 insured marketplace is a really Colorado recently. And I looked at home just to get a feel for what's going on and you know under 200 dollars plus per square foot for a home and that's incredible. Incredibly high school some of these local markets might get a crash nationally I'm not so sure county your point I was reading not too long ago that some of the higher. Homes are starting to suffer some issues but. A lot of the entry level as you can imagine and reveals a lot of the entry level were first family homes are definitely flying off from here help the market pretty quickly so I think that's the case you yet. Well that's our in the new segment here on the financial symphony with Richard crew drilling 806465996. Into the gulf. The ground there's much more coming. It's time. For another musical connection. Well we blend the worlds of music and finance together. Here's a friend of the show financial advisor and musician mark Loy and we're bronze stuff. Background music is something that. Is a part of your life whether you realize they're not having if you watch it. TV show or a movie or actually it's kind of soundtrack of my life Marca LA. Exactly and sometimes we just don't realize that they error. But it. It makes such a powerful impact especially when you're talking about movies scores soundtracks. I mean what the music does sets the feeling. For what's get raid happened on the screen. And it's powerful so I kind of like when the when the Oscars are given out for the best music I. To me that. I like that part of you know some stuff like screenplay and and effects and a kind of thing you for some people that's their deal to me it's the power of the music. And the music and just. Stir up emotions well just think about what would Star Wars in and gone with the wind in and how Potts I coach remembers oh yeah yes Psycho. And a jaws off just a you are sitting at the end of your seat and in the music would stop you like. Okay Charles didn't come back the next thing you know it's all got to about the so a judge here's some background music do you think are something really. Ban is getting ready to happen what about what about when you call somebody and you get put on hold it. What about waiting on the phone and your hearing music usually been that would be taught totally different experience led the losers silence. Right it is pass the time away in a lot of times because the wonders of modern technology. It's easy to to pipe in music now than ever on your phone systems that you're small business or even big businesses yesterday. I had an appointment for the Dennis fan so I was at the dentist office and I'm sitting there listening to there you know radio or listens to music going there wasn't radio station but it was actually just -- song after a strong Republican Mike was a pandora something that's so you know right there like that you know some online thing. Some listen in the Fleetwood Mac and not her little bit at Carrie Underwood and I'm getting into the music alarmed getting my teeth cleaned up like it's just past the primal yes. Yeah I'm the same way because I love music so much in and it really does think about if you go for a massage. Or go to a spot they always have like it is the same as if you go to an aquarium they always have like. Peaceful music playing in those places like it may be India or something like that it yeah it'd be pretty worried if it was actually quiet. Exactly and and you can't have a party without music her a a you know not Nutting parties that I go to anyway to be pretty Lleyton being regulated if there wasn't in the party exact already kind of sets the tone. And the thing that's most important about background music isn't humane I didn't notice that is they are as mark said but it would be obvious. If it was not bear in other words it's easy to take it for granted it's so let's talk today on this financial symphony about. Background music in the financial world the things that are easy for us to take for granted but would be conspicuously. Absent if they weren't there. Okay I'll give you example yet in example. I had so badly that came in and we were doing something called a retirement plan income plan we call our financial road map where we're literally plugging in. Their expenses were factoring in inflation so that we you know you want when we retire doesn't mean we're going you know die it means that were entering another phase of our life. And that could be anywhere from 20/20 530 plus years right there these days you never know. So if we have expenses every month you know 678009000. Dollars a month. And we have to factor in inflation with a all of that right right. So you when you sit there saying where's the cash gonna come from where is the income on a come from to pay for all of these expenses that we have. And all the inflated expenses down on the road. Well Social Security is one stream of income. And it's something that you know with Social Security it's a vital part. Of what most folks retirement plans include another one for you in the financial world is life insurance what about mark. Well you probably don't think twice about paying in the premiums on your life insurance policy because. It's critical especially the younger you are especially if you're still raising children you have to put children through college or if you are the bread winner. A year leaving a spouse. In the poor house if you die basically. So life insurance is a critical part of a financial plan. Now there's different console life insurance policies out here you've really got to be careful Kanye by you hear a lot of commercials. Ron about. Term insurance you know Jack is 32 years old in the combine a ten year term policy. You know for 750000. Dollars for thirty dollars a month. And he has high blood pressure. So is it's is the life insurance whether they're trying to entice you to buy life insurance on line. The other thing about term insurance like fifteen year term. Is that in ten years the premiums of goals so high that you're forced to drop that policy because it would be calls prohibitive. To keep it and you just got to hope that in ten years or fifteen years or twenty years whenever expires that day you either don't need life insurance anymore. Or beat your insurer a blow enough to buy a new policy at a more reasonable rate. Then what the old policy was going to go up to. And that's what yeah that's why you have the really sit down and play in the south. Now some people it's that bottles a year ever a situation where I won't need some life insurance. And sometimes it doesn't make sense to have like insurance regardless. Of whether or not you're supporting children or your supporting spouse the negating sample. Later on in life when you retire. Well life insurance is wealth creation for passing on to your heirs tax free. It's a way of wealth transfer the transfer of wealth tax free your IRAs your 401K is they're all taxable to your kids or your family except for your spouse. And a lot of people call that a ticking tax retirement time bomb here. Where life insurance is tax free. To me that is a vital part of protecting the money to make sure you got all of your bases covered all your right dotted all your t.s crossed and our financial life throws all over the country can share with yet how these different you know parts of your retirement plan are critical and how you need to consider each and everyone double Ron tellem how to make that. Open just to get the following call 806465996. That's 806465996. Beaten got a complementary review of your financial plan. Just call now to take advantage 8064659960. You're listening to the financial company that show that make sure your financial plan at a perfect fit. Boy you back here Willis on the financial symphony with Richard good to really investment advisor representative act Carolina retirement resources. Serving is here in the Charlotte metro area from his office and hunters go 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 Richard. Here on the financial symphony we try to cover a lot of topics each and every week in this week's 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 401 k's 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 F a Q. 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 of or not. Well you know until 2011. When the Department of Labor released its participants investment advice rule. You know planned 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 search provider 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 agency is okay your sixty years old for you wanna put this much in bonds and how much in stocks and that's not necessarily be killed investment advice. Again my experience is that most people who have four point case 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 courted the rule is your company offer investment advice those investment recommendations must be made. By an unbiased computer program if larger fees must not be linked to specific investments. And the advisor short is 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 and not an groups that in and the advice you receive should be independent of the administrator of the 41 okay. You know this way conflicts of interest can be imported. Let's certainly good points there to make comment because I was often 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. Though most advisors would say you should never take out of 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 who I think they have a pew five years to pay the loans back. But that varies from plan the 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 would crawl and regardless I think have a loan provision. In the plan is probably a good thing you know for those on told 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 savings 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 that axis is only a high res. 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 fourth shooter so investments in the account as 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. Listening to the financials 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. Clearly hasn't 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 of them 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 that predominant reason most people would consider rolling their 41 K money over to an. Is that they would gain access to more investment options and have more control over there count. 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 401K with that company. You know companies are required to disclose the fees they take out. Of your counsel make sure. That you turn around and 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 mishmash of overlap and funds. That may not suit your age you may not be you know appropriate further risk if you are willing to take. In that case it might make sense to consolidate although all 41 case into an irate. 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 that goal. 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 worldly assets into and hire ray or raw fiery. You can consolidate your 401K into your new employer plan or you can simply cash and now 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 paying penalties. Soviets left your job you have 41 K with a previous employer and you're at least 59 and a half years of age. I'd like to offer you the opportunity to become inferred 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 you know 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 to assure 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 by planned 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 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 two or thousand dollars saved for retirement. But the calendar goes 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 he can't call right this minute certainly right that number down and call as soon as you can press the nation will always get the better of us. To take advantage of this great offer take advantage and get this thing complementary review from Richard future really investment advisor representative. Thank Carolina retired 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. Willis getting to know you time here on the financial symphony with Richard drew to really. We would love to have Julian priest saying that the background but unfortunately the mouse would want royalties. And he's rich enough already so who could move on exist ask Richard his question of the week. He's a this is a ran them off the wall question it's a 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 air in your life. What age you wouldn't be forever by the way yet to be stuck there forever I would see at age 4040. Okay. You know your. You know at forty I was though old enough to know better and young enough to do whatever I please you know so and also have the financial wherewithal to do afford it so. Yeah I think forty it 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 I think age forty will be a perfect age to continue to do so. OK let's just think as a my daughter was about sixteen when I was forty so I'll probably skip that one I think that the act at. I thought I might go with 45 those she's out of the house my wife and I MB measures of 46 and also does back up a year but. Is that her twelve out of those twelve was always agree it's 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 in that area where he can still play and just enjoy life and pretty carefree twelve I think for the most part. Now on page forty I thought about and that was prime time for me they go well I certainly agree with that as a good answer ask yourself that out there. Dealing and if you had to be stuck at one needs for ever what agent might eighteenth. That's are getting to know you would Richard Bruce surely we've got much more to come on the program to stick around we'll get back to. You want to be sharpened not to be flat and retirement. Is that financials and it. You're cruising down the homestretch here today on the financial symphony with the Richards who to really investment advisor representative. At 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 up and come in. For a consultation a complimentary consultation is George to be had by calling 8064659. And 96. That's 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 401K Stew for once they roll overs. 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 PO one. What you do you select a fund designed hopefully have the right combination of assets based on when you plan to retire or your target date. And you choose a fund 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 approach shoes. For those of you that don't trust long term market performance. And instead agonize over short term lawsuits. 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. In a problem is that Parker hearsay losing cash and bonds it deprive 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 and you end up with a nest day that could be hundreds of thousands of dollars more than it could've 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 dormant 2008 financial crisis says 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 fund's duration of shifted almost completely to say bombs. It turns out that many were far more aggressively invested in stocks. Then they thought they were so this suitability of target date funds from masses of investors relies upon a single simple assumption. That fixed income investments aren't fax eight. They're not so in my opinion if you're within five years of retirement I wouldn't recommend investment target date funds. All right well so it's to get information I 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 case absolutely because it would be uses they tend to have more. Stocks than they do bonds anytime you invest in stocks. You're gonna have higher fees rose 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 of course that was target date funds we were discussing with Richard through 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 the. Well you know I've always been one of those guys we're 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 harbors every return has nothing to sneeze that. But dependent on your financial situation Macs now your contributions to your 401K it just may not make sense. So this is 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 putting 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 that 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 out your 401K. 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 match you know it'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 know 41 K such as exchange traded funds so. If you're in a place financially where you can Max out your 41 K and your rock fire 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 burger and a lot of it comes down to was 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 them 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. Have a place in your retirement nest day and you need 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 raise and that is the time and taxes you know with a 41 K. Roth your pay taxes upfront and no word you contribute Q your retirement account with money from your paycheck after it has already been attacked. Once in the account your money gross tax preferred that retirement qualified were trolls come out tax free. By contrast. Contributions true traditional 401 k.s or made it with pretax dollars. The money is allowed to grow tax deferred but when it comes out its 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 wants is for one K rock became available to you. You now can put up to 24000 dollars if you Rhode age fifty into that brought biracial guy 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 in retirement is to have 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 cut 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 there raise and a 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 dollar state retirement I'll offer you this free consultation 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 tools and 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 if you want their route to financial security in and pay. It's and that number is 806465996. 8064659. And 96. The on the calendar with investment advisor representative Richard culturally. I Carolina retirement resources again 80646. 5996. Lots that Richard can do for you but none of it if he doesn't get the chance to know you and that's where you command to grab the 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 thank you mark will do it all again next week right here on the financial symphony for more from Richard put drilling at Carolina retirement reason. A registered investment advisor. BCM and Carolina retirement resources are independent of each other.