Retirement Planning - Are you on Course?

Uncle Sam, Uncle James OR Professioanl Retirement Planning?

Are you Following the Uncle Sam

What approach have you adopted for your retirement planning? Are you following the "Uncle Sam" approach, the rich bachelor "Uncle James" approach or a Retirement Plan from an Independent Fee-Only Planner? Read on to see where you fit.

Uncle Sam ... He'll take care of Me!
In the Uncle Sam approach the individual contributes faithfully to the company 401(k) plan, thinks there is a pension that will come at retirement (but isn’t sure), hopes that Social Security will be around as a safety net when retirement arrives and doesn’t have a clue how to calculate how much income they will need in retirement nor how much nest egg will deliver that income.

Is your Only Retirement Planing your Age?
Are you on track for retirement just because they keep getting closer and closer to that magic retirement age of 65? Of course most of us think our retirement age is the day we turn 65, but unless you have already passed that magic 65 mark, your “normal retirement age” is actually something north of 65, depending on what year you were born. So the Uncle Sam approach is based on hope . . . hope that everything will turn out all right.

If not, you can always count on Uncle Sam . . . can’t you?

Ready to Begin? Call David Anderson TODAY for a Complimentary Get Acquainted Meeting. (816) 792-2550

Maybe I Better Find Rich "Uncle James"
With this approach, You will spend a lot of time reading the multitudes of books on retirement (that the authors hope will sell well to secure their own retirement). Next they subscribe to Money, Smart Money, Kiplingers and other magazines to stay current on the latest trends. They diligently search the Internet for any help that might be available. (Congratulations on your diligence in finding this website). They might even take a retirement planning course at a community college or the local university. Finally they are ready to start planning.

They begin considering the following sample of retirement related questions:

What should I do if the stock and bond markets don’t cooperate?
How will I know if the markets are not cooperating?
Am I taking too much risk in my investments?
Am I taking enough risk?
What is risk anyway? I can’t afford to have the “Enron retiree” experience.
Can I factor in the inheritance from "Uncle James" who never married or had children. After all he saved all that money and promised to leave it to most of his nieces and nephews?
Do I have an Uncle James somewhere?
How long will I be retired?
How much annual income will I need when I retire?
Will there be enough money to travel? (Winter in the Virgin Islands is a must.)
How much will my pension contribute to that need. ( I do have a pension, don’t I?)
How do I factor the inflation rate into that amount? Will the inflation rate change?
How much will I need in the retirement accounts to produce my desired annual income?
Is my 401(k) on track to get me to the amount I will need in the retirement accounts?

You Just need to Know the Stock Market & the Internet & Computers
To sum up the second approach, all you need are the following:

A lot of time for reading and Internet research
Good Microsoft Office Excel skills
And an understanding of the stock and bond markets.
1. Genealogy skills can also be a plus in searching for your Uncle James who may be a better funding source than your Uncle Sam.

Ready to Begin? Call David Anderson TODAY for a Complimentary Get Acquainted Meeting. (816) 792-2550

Are all Professionals the same?
This brings us to the third approach: hire a Independent Fee-Only Professional to develop a Retirement Plan. But what kind of professional do you hire? If you need one to look for Uncle James go to Google and search on “genealogist” or “private investigators” (depending on your situation). For serious retirement planning you have several options.

Investment Advisors are "Sales people"?
One option is to interview salespeople from several investment firms. They do financial planning on the assumption that you will purchase investment products through them to fund your needs. The commissions generated pay for their time and expertise. There are a lot of salespeople who are great financial planners. What separates the great from the rest of the pack is the term “fiduciary”.

Ready to Begin? Call David Anderson TODAY for a Complimentary Get Acquainted Meeting. (816) 792-2550

Fees, more Fees, "trailers", and the fine print means More Fees!
Put simply, a fiduciary is obligated to act in the client’s best interest rather than his/her own interest (or more importantly, the investment firm’s best interest). How do you know when a salesperson is acting in your best interest? You ask; but you also have to ask for disclosure of commissions and fees paid to the salesperson for the various products that they recommend. Also you need to ask if there are any ongoing fees or “trailers” paid as a result of the transaction. Another source of income are referral fees the salesperson might receive. In other words, read the fine print carefully. Once you have all that data you are in a better position to judge whether the salesperson will act as a fiduciary (remember, your best interest instead of theirs).

Financial Planners ... Are they all the same?
Well, NO ... Another type of professional you can engage is a financial planner who works as a “Fee-Only" Financial Planner. A “Fee-Only financial planner” is compensated directly by the client, and more importantly, only by the client. There are no commissions, no “trailers’, no referral fees or any other compensation paid by a third party. The Fee-Only planner has the luxury of giving independent, objective advice because he/she is getting paid to do just that. A “Fee-Only” planner is receives only what the client agrees to pay based on the written agreement between them.

There are two kinds of “Fee-Only” planners.
If you are still reading you have probably figured out that there is going to be at least one more choice that has to be made, and there is. One charges a fee based on the amount of assets that the client possesses. Suppose you have $250,000 saved toward retirement.

How Important can you afford to be??
The planner might charge $2,500 or 1% to prepare a retirement plan and manage your retirement funds on an ongoing basis. Obviously the more you have to invest, the more important you become to the planner. In this arrangement the planner’s interests are better aligned with the client’s because the planner will prosper as the client prospers.

Yes!! Advice when you need it, but without the Commission!
With Fee Only Financial Planning You are in control of implementation, in other words we develop the "Road Map", you Drive... We are ready with "course corrections" (what should you do when the market changes - up or down?) We charges an hourly fee, much as an accountant or an attorney would. The hourly fee reflects the amount of time the planner spends in evaluating the goals, needs and resources of the client to develop a plan. Typically, the planner meets with the client in a complimentary “get acquainted” meeting to determine whether there is a fit between planner and client and also to determine a fee for the engagement so that the client knows the cost in advance.

Everyone Can get the Financial Advice they need!
Since there are no income or net worth minimums to meet, the scope of the engagement can be limited to the most pressing concerns or expanded to include a coordinated financial plan. The extent of the process is guided by the specific goals and needs of each client.

Hourly, As Needed Financial Planning and Advice!
Now if you are still with us, you might have already guessed that the sponsor of this website, David Anderson Financial Planning, LLC, provides “Hourly, As Needed Financial Planning and Advice”. We believe that this practice model enables us to clearly act as a fiduciary since our only agenda is to give each client objective advice tailored to the client’s individual situation.

Financial Planning is for Everyone
Financial Planning is for everyone, not just the rich. So whether you are building assets for the future or seeking to preserve, protect and enjoy the wealth you have accumulated, we can assist in realizing your goals.

Ready to Begin? Call David Anderson TODAY for a Complimentary Get Acquainted Meeting. (816) 792-2550

Need More Information?? Explore our website.