3 Questions a Financial Advisor Can Help You Answer
It can be hard to know where to start when retirement planning, or who to go to for answers. Recent market drops and recoveries, increased unemployment, and uncertainty about the future could have you thinking about your financial future. If you’re wondering what your course of action should be right now, you should consider your risk tolerance, where the market is heading, and how you can minimize your taxes. These are three questions a financial advisor can help you answer.
What Is My Risk Tolerance?
If you don’t want to put off retirement or downgrade your retirement lifestyle, you may want to reassess your risk tolerance. Risk tolerance can change with age. If you haven’t changed your investment approach in a decade, it can help to talk with an advisor who can help you quantitatively and qualitatively assess your risk tolerance. You might consider how you will cover your basic living expenses and your desired retirement lifestyle. From there, an advisor can help you decide on an appropriate investment strategy designed for your unique financial situation.
Where are the Markets and Economy Headed?
The first quarter of 2020 was a rollercoaster, with record single-day drops and gains. It was the Dow’s worst first quarter in history, and oil had its worst quarterly performance ever. Recently we’ve seen significant recoveries after the worst of the pandemic. While no one has a crystal ball, an advisor can give you a sense of how past recoveries have played out, and where certain sectors of the market could be headed based on their research and analysis.
How Can I Minimize My Taxes?
There could be several ways a financial advisor can help you with tax strategies. Every part of a financial plan is connected, including an investment strategy and a tax minimization strategy. If you’ve sold off losing investments this year, you might be able to deduct those losses from your taxes if you itemize. Or, if your 401(k), IRA, or other retirement account balance has gone down, you might consider a Roth conversion. In this case, you would pay tax on the amount converted now, and then enjoy tax-free withdrawals later in retirement. If you take Required Minimum Distributions from your retirement accounts, note that Congress has suspended RMDs for 2020 in an effort to help those whose accounts took a hit recently.
One of the advantages of going to one professional for all of your financial planning needs is that everything from investment strategies to tax minimization works together in one overall plan. We can create a retirement plan that helps to mitigate risk in a down market. If you need to update or create a plan, reach out to us to schedule a complimentary financial review.
3 Things to Know Before Making Summer Travel Plans
The COVID-19 pandemic has resulted in many things, including canceled trips. Americans are now wondering about summer travel plans, and if it’s wise to make them before the country fully reopens. Just because everything isn’t completely back to normal yet doesn’t mean you can’t or shouldn’t take a vacation this summer – even if it means staying closer to home than you originally planned. Here are three things to know before making summer travel plans.
Can and Will You Retire in a Crisis?
Life is unpredictable, and there are a number of events that can impact our finances, from global pandemics to personal crises. And while adjustments sometimes may need to be made to get back on track, no one wants to put off an event like retirement because they feel forced to. It’s important to take stock of what you have and what you’ll need if you’re nearing or entering retirement. No rule says you must put off retirement, or that your desires are beholden to the state of the world when you reach retirement age.
3 Ways to Stay Safe As We Get Back to Normal
America is starting to reopen, but that doesn’t mean the threat of the coronavirus is gone. While we can all be thankful for looser social distancing measures, it’s still important to think about safety. Here are 3 ways to stay safe as we get back to normal.