Invest for Retirement Without a Plan? You're on Thin Ice
By Joseph A. Clark
NEW YORK (AdviceIQ) -- To listen to me commenting on the Olympic figure skating in Sochi, youd think I was an expert. But I know very little about it. Tragically, too many investors make decisions whose basis is as thin as my knowledge of skating.
As we watched the Winter Olympics skating competition on TV, I pointed out to my wife a Salchow jump and then a death spiral. She looked at me with surprise and marveled at how much I knew about the sport.
Then she asked my take on the competitors technical score. I confessed that my opinion rested on what I like and hardly qualified me to pass judgment on the entire routine. My meager knowledge came from reading an article about skating maneuvers.
Truth be told, we go through life passing judgment based on many little pieces of information, without truly grasping the context of the entire issue. The blunders in retirement planning are legion, resting on such misperceptions.Shaun White, who lost his bid for a third Olympic gold medal in the halfpipe, a sloping U-shaped course where the athletes show off aerial maneuvers. White had trouble with the walls, which were more vertical than he was used to, and the bumpy surface. He finished fourth. While these conditions were outside his control, he also failed to make adjustments. By ignoring changing conditions and hoping for the normal outcome, many investors end up with retirement surprises they could do without. What if you misjudge the effect of the new 3.8% tax charge on investment income for couples with more than $250,000, mistakenly thinking it doesnt apply to you? That spells problems with the Internal Revenue Service. There are many art forms in the world. We watch the Olympians and cheer for their success and safety. It's an advisers' job to watch over the families they serve with the same competency, clarity and communication they use in their own finances. It's an investors job to envision goals and use all the intelligence and flexibility they can muster to achieve them. Follow AdviceIQ on Twitter at @adviceiq. -- Joseph "Big Joe" Clark, CFP, is managing partner of Financial Enhancement Group, an SEC-registered investment advisory firm in Indiana. He teaches financial planning at Purdue University and is the host of "Consider This with Big Joe Clark," found on WQME and iTunes. He is a registered principal offering securities and registered investment advisory services through World Equity Group, member FINRA/SIPC. Big Joe can be reached at email@example.com, or (765) 640-1524. Follow him on Twitter at @Big Joe Clark and on Facebook at here. AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.
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