Get a check-up. Mannato wants clients to be aware of where they are financially. Ensure that your spending is within your income, and that you’re still able to save. “Individuals need to sit down with a financial advisor once or twice a year just like people go to the doctor,” he says. “Individuals who don’t go to the doctor for three or four years, they may have problems that they don’t know about. Sitting down with a financial advisor can give them a view from a different set of eyes and a different thought process that the clients aren’t aware of.”
50+
Keep saving and manage risk. “As long as someone is employed they’re still in what’s called the accumulation mode, and as long as they have income, they need to consider saving for their goals,” Mannato says. “This is where sitting with an advisor to make sure the client’s risk tolerance meets their objectives is important, because they don’t have the time now to be in risky investments. There’s not much time for it to rebound, so this is where risk needs to be managed.” Pilz says at this point she’ll work to balance a portfolio. “Someone who is 50 should be investing in a balanced fund, which would be pretty much 60 percent stocks and 40 percent bonds, depending on their risk tolerance,” she explains. “If they have a great tolerance, then maybe 80 percent stock and 20 percent bond. You’d want some growth in that portfolio but also some bonds to minimize the risk so that they don’t lose money.” Keep reviewing your assets. “As you move closer to retirement age, start changing your asset allocation because you don’t want to be 100 percent in equities,” Pilz advises. “As you get older you mix to stabilize.” Haven’t started saving yet? “The sooner that you [start saving for retirement] the better you are later on in life because your money compounds and is worth much more at the end of that time period than if you started later on in life,” Pilz says. “But you also have to look at it like it’s never too late to start.”
Endless alternatives
Each person has an infinite number of variables concerning income, lifestyle, and goals, and many advisors will say it’s hard to generalize where a person should be with their money at any given point. Beth Jones, president, financial consultant, and registered life planner at Third Eye Associates in Red Hook, says that her firm’s advisors take a unique approach to this type of counseling. “We do financial planning on the foundation of a life plan, what people are most passionate about and what their fundamental values are in life,” she says. “We don’t strictly look at their finances, we look at their life in a holistic way and do a series of exercises with people to get to the source of what’s most important to them.” After analyzing their current life and determining their “ultimate” life, they guide clients to discovering ways to live a more rewarding life now rather than later. “A lot of people have this idea that when they retire, they’ll have enough money and they’re going to do what they’re really most passionate about,” Jones says. “We don’t believe in that theory. We believe people should live their most fulfilled life all the time.”
Experts Quoted in this Article
Steve Mannato, William Tell Financial Services
(518) 782-9155; www.willtell.com
Sharon Pilz, Salisbury Bank
(860) 435-9801, x1503; www.salisburybank.com
Beth Jones, Third Eye Associates
(845) 752-2216; www.thirdeyeassoc.com
