Why You Need a Financial Planner More Than You Think

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Why You Need a Financial Planner More Than You Think

Do you think you have too little money to need a financial planner? My name is Evelyn, and I have worked with a personal financial planner for the past seven years. I want to tell you that even if you have only a small income and very little money, you can use the services of a financial planner. I'll explain how investing even the smallest amount of money can help you become wealthier over time. I'll go over investment strategies and let you know how to find the best rates for your situation. I hope I'll convince you that hiring a financial planner is a move that makes sense.

What To Do With Your 401K Money Now That You've Retired

The decision about what to do with your 401k as you are nearing retirement is important. Once you retire, you won't receive the same matching contributions that you did from your employer, and you might wish to rollover the 401k assets into a new investment. You should speak with a financial planer who specializes in retirement planning and determine if you should rollover the 401k, and if so, into what asset class. You will likely have much more investing options once you move it into your own account, so you will need help planning out what the new investments should be.

Here are some of the potential investments you should speak with your retirement strategist about.  

Purchase A Dividend Paying Index Fund

If you want to keep the assets in stocks, but want to get rid of risky holdings, then you might like a broad based Index fund. These funds are composed of many different stocks, and they follow one of the major indexes (Russel, S&P 500, etc.,). This diversification helps prevent a large loss of principal should the market take a downturn. Owning lots of shares in a few companies is dangerous because if one of them plummets in value, you will be in trouble.

When looking for an index fund, choose one that pays a nice dividend. This can provide you income without having to withdraw the principal.

Choose A Mix Of Corporate Bonds And T-Bills

Some people are hesitant about stock, even when you are diversified. For those people, bonds might be the answer. These are considered to be a less risky investment, especially if you stay away from "junk bonds" and stick with AAA rated corporate bonds and government bonds. The downside to bonds is that your principal won't grow much during a stock boom (like an Index fund will), but on the other hand, they also won't crash like stocks can.

Speak With A Financial Advisor About An Annuity

Finally, there is another type of investment that many retirees might like to consider. This is much different than buying a share in a company (stocks) or buying a debt obligation (a bond), it is an annuity. Annuities are usually sold by insurance companies. An annuity is purchased from the company for a lump sum of money. Then, the company who sells the annuity agrees to pay the person a predefined amount of income every year. This income is based on a number of factors (amount of the lump sum, the person's life expectancy) and will not fluctuate like the price of a stock or even a bond will. They are complex arrangements, and you will need to have a financial advisor like Wealth Mechanix walk you through the process.