Managing investment risk during the early stages of building wealth may require a little different strategy than managing risk for people nearing or in retirement (see our DAIP™ process).  The primary reason for this is that you may have time to recover and you are likely not living off your nest egg .  Not everyone who is just getting started is younger but if you are, the statistics show that time in the market is far more important than timing the market.  Market corrections occur virtually every year and by diversifying your investments among several asset types, this may enable you to take advantage of growth potential in different sectors and various financial markets. Focusing your money in one asset can be very rewarding if you guess correctly and very costly when you make a mistake.  You may want to avoid placing your retirement savings in only one type of asset.

Also consider dollar-cost averaging which is the process of making regular investments on an ongoing basis, regardless of price.  This can make the average cost of your investments lower than the average market price over time.  Although dollar-cost averaging may not mitigate market, inflation, and longevity risks, it typically offsets their impact on the value of your investments.

Next, establish your priorities. We can assist you in understanding factors that will impact your retirement plan, such as your retirement lifestyle, risk tolerance, retirement date, unknown risks and your desire to support your family members or a favorite charity. Our unique process of retirement planning uses a method called Monte Carlo analysis, that calculates a probability of success in achieving your goals. This helps you plan for and maintain your standard of living while meeting the goals you have in life. A meeting with an MGFA advisor will help you develop a plan that helps meet your needs.

Whether you’re changing careers, buying a new house or starting a family, we can help you live the life you choose today, while still prudently planning for the future.

Wherever your work or life leads you, we can assist you in managing your cash flow and allocating your resources, helping you reach both your short- and intermediate-term goals without endangering your long-term plans.

Many retirees underestimate how much they’ll need to cover healthcare expenses. In fact, a Center for Retirement Research study recently estimated out-of-pocket costs for a healthy 65-year-old couple to be $260,000 to $570,000 for their entire retirement. Income from investments and Social Security can go toward paying ongoing medical costs, such as Medicare premiums, deductibles and copays, but as healthcare costs continue to rise, this could place a significant strain on your retirement. We can work together to anticipate your healthcare expenses in retirement and account for them within your overall retirement income plan.

Another risk-management option is long-term care insurance, which covers a range of nursing, social and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability. While you can’t know for sure if you’ll need long-term care or for how long, a comprehensive policy can help you plan for the unexpected.

Depending on your financial situation, you may be confident you can fund a comfortable retirement and still allocate funds to leave an inheritance for family members or to donate to a favorite charity. The first priority should be ensuring your expenses can be met before you leave a monetary legacy behind.

We can assist you with your estate and legacy planning, including helping you to optimize your assets, potentially mitigate tax implications, and determine the course most appropriate to your situation. In addition, we can help you select effective vehicles to implement your plans.

Keep in mind that money isn’t everything. Passing on ideals, such as ethics, morals, faith, and religious beliefs, is 10 times more important to both baby boomers and their parents than the financial aspects of inheritance, according to the 2006 Allianz American Legacies Study.

In addition to Social Security benefits, you probably have at least one IRA, 401(k), pension plan or other assets you’re relying on now for income – or counting on later – to finance your retirement years. At this stage we feel that you should work with a professional to maximize the benefits you receive from any withdrawals you are making or plan to make.

Although you’re entitled to draw Social Security benefits as early as age 62,
tapping into your benefits before full retirement age can permanently reduce your benefits. In general, electing to delay your benefits past full retirement age – up to age 70 – will increase the amount you are eligible to receive.

When to start taking Social Security benefits depends in large part on your income needs and your health. It’s also important to consider how the amount of your monthly benefit might affect your overall retirement plan, including implications for withdrawal rates and your tax situation, among other factors.

Widespread economic weakness and market fluctuations have taken a toll on many investors. If you are at all concerned your retirement plan may no longer be sufficient to meet your needs, don’t delay taking action. While there are no magic fixes, a number of effective strategies do exist for potentially mitigating losses, generating additional income and planning for growth, including:

• Planning for long-term care needs not covered by Medicare or other insurance
• Paring your spending and rethinking non-essential goals
• Allocating a portion — or a greater portion — of your portfolio to undervalued, growth-oriented investments
• Preserving income with financial products
• Hedging income against rising inflation with investment options that adjust to changes in the inflation rate
• Returning to work on either a full-time or part-time basis