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What Are You Missing When You Invest on Your Own?



Video Transcript:

Hi everyone, my name is Kristina Strickland, and this is Bruce Glenn. We’re going to just speak for a few minutes on things that you might miss out on if you are trying to manage all of your investments on your own versus seeking the advice and help of a financial advisor. So, the top three things, just to keep it brief, that I think might be missed if you take all this into your own hands and, and try to do everything yourself, which is admirable.

But there are three things that you might. The first one is that investors tend to sometimes make emotional decisions. Sometimes we have a tendency to sell out of a fund, for example, when it’s down. Which as you know, if you sell out of it while it’s down, you don’t get to own it anymore during the recovery.

And so sometimes that may or may not be the right thing to do. Working with a financial advisor can kind of help you process whether or not that action is the correct one to take for your portfolio. Yeah, it’s especially tough these days because you’re getting barraged by 24/7 media and the media’s job is to scare you enough to stay tuned into their show, “Storm of the Century”.

They’re not going to scare you if they’re not giving the worst possible news. And a lot of times that really does vary from what the reality of the situation is. So, emotions are very easy to lose control of when you’re an individual person. Don’t really have a good thumb on what’s going on, the overall actual numbers of the economy, markets, and those types of things.

So, I agree a hundred percent. That’s a really, really important thing to stay the course at the risk level. You’re good with that. And then with good quality investments and, um, you know, conversations with your financial advisor. Make sure you’re on the right path. The second thing that folks will often kind of overlook when they’re managing their own portfolios is that you might not have the best strategy in place for cash flow planning.

Mm-hmm and tax strategies. So, for example, when you’re retired and the time comes that you’ve, you know, saved hard all of your life. You’ve worked super hard for this goal, now you’re here in retirement. And you need X amount of dollars every month. Some folks have multiple accounts, and so it’s hard sometimes to plan which buckets should I be pulling funds, funds from, and when, um, and how will that impact not only my taxes for the year.

Which tax bracket my social security’s going to be in, but also maybe it might impact my Medicare premium as well. So, things like that, that in distributions, we really have to be strategic about how we’re going about that. Yeah, it’s really important, and as you said, and we’ll make some decisions with folks and we’ve got very sophisticated planning tools and we’ll want to work through, when is the best time for you to start Social Security.

Make sure you’re on path for your Medicare. Do you need me to have Medicare supplement? Your required minimum distributions are very important and for most people in this day and age, most of the money they save for retirement is in a pre-tax form. They didn’t pay taxes on when they put the money in, it’s grown tax-deferred, but when you take it out, you’re going to have to pay taxes on it, on the amount you take out as you take it out.

And so, there are some options where we can look at for somebody, maybe we should look at some Roth conversions and maybe stretch out that social security start dates a little bit and spin down some of that pretax. So, you can kind of mute the effect of that required minimum distribution when you hit that age, because if you haven’t spent down any of this pre-tax money, that’s going to be a lot bigger bucket and that certainly can throw you into higher premium on your Medicare as well.

Mm-hmm and I think the last, the biggest kind of end, if you will to the three things that you’d miss is staying just current on regulations and investment best practices. For example, every year the contribution limit increases. So just knowing how much you can actually save this year and what are the new trends in investment to make sure you’re being as efficient and as hopefully as inexpensive as possible.

Right, and we’ve done a lot of reports on the Secure Act 2.0 and there are some pretty big changes going on with that. You’ve got changes on the required minimum distribution. You got like you said, you’ve got your change on your annual contributions, your catch-up contributions have also changed and there’s a whole host of other things that have changed, and that’s it.

As I said, said, ever moving target. So is important to keep up abreast of the different regulations and, and guidelines there. Awesome. Well, those are our three, so we hope you learned something new today, and good luck with all of your saving and retirement planning. Thanks!

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