I always enjoy talking to people about retirement planning. Here are some of the questions submitted to me during a recent television interview in Pittsburgh
Q: Bill, what differentiates you from others who call themselves financial planners or financial advisors?
BILL: Well, I take time to listen and understand my clients – to address their total wealth management needs – such as retirement planning, estate planning and tax issues.
BILL: Well, I take time to listen and understand my clients – to address their total wealth management needs – such as retirement planning, estate planning and tax issues.
Anyone can call themselves a financial planner, but only a CFP® practitioner has met the specific educational and testing requirements giving them a distinct advantage over other financial advisors due to their comprehensive approach to the financial planning process.
(The CFP® certification marks are owned by the Certified Financial Planner Board of Standards, Inc. and are awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.)
Q: A big part of what you do is to help people make important decisions about their retirement plan when they retire?
BILL: Right. When you retire or reach normal retirement age, you may be entitled to take a distribution from your retirement plan.
BILL: Right. When you retire or reach normal retirement age, you may be entitled to take a distribution from your retirement plan.
Q: What are my options after I leave my employer?
BILL: In general, you may be entitled to an eligible rollover or lump-sum distribution, periodic payments or discretionary distributions.
BILL: In general, you may be entitled to an eligible rollover or lump-sum distribution, periodic payments or discretionary distributions.
- Rollover - A rollover is a direct or indirect transfer of your retirement assets to another retirement plan or IRA.
- Lump-sum Distribution - A lump-sum distribution is a withdrawal of your entire balance in one taxable year.
- Periodic Payments - Depending on the plan, you may be able to receive installment payments or payments spread out over your life expectancy.
- Discretionary Distributions – Any withdrawal from your retirement plan that is not a lump sum or annuity payment.
Q: Do I need to change the way I invest during retirement?
BILL: Absolutely. In many ways, investing during retirement is more complicated.
BILL: Absolutely. In many ways, investing during retirement is more complicated.
Q: How so?
BILL: In retirement, there’s uncertainty about how long you’ll live, rate of return expectations and inflation. Your ability to tolerate risk is lessened – you have less time to recover from losses – so you may feel less secure about your income.
BILL: In retirement, there’s uncertainty about how long you’ll live, rate of return expectations and inflation. Your ability to tolerate risk is lessened – you have less time to recover from losses – so you may feel less secure about your income.
Q: You wrote a new book to address these issues.
BILL: Right.
BILL: Right.
Q: Where can I get a copy?
BILL: Amazon.com, through your local bookstore and online from leading booksellers.
BILL: Amazon.com, through your local bookstore and online from leading booksellers.
Q: Tell me about it.
BILL: Sure. My book shows how to derive sufficient income to maintain your chosen lifestyle and to make sure your assets last for the rest of your life.
BILL: Sure. My book shows how to derive sufficient income to maintain your chosen lifestyle and to make sure your assets last for the rest of your life.
Q: To ensure a consistent and reliable flow of income for your lifetime, you must provide some safety for your principal.
BILL: Yes. But unfortunately, safety comes with a price – reduced growth potential and erosion of value due to inflation.
BILL: Yes. But unfortunately, safety comes with a price – reduced growth potential and erosion of value due to inflation.
Safety at the expense of growth can be a critical mistake for some retirees
On the other hand, if you invest too heavily in growth investments, your risk is heightened – you may be forced to sell during a downturn in the market should you need more income.
Q: How then should you manage your investments during retirement?
BILL: The answer is different for everyone. You should tailor your plans to your own unique circumstances.
BILL: The answer is different for everyone. You should tailor your plans to your own unique circumstances.
. The Second Edition is now available and up to date for the new tax laws and includes tips about what to do know and in 2010.
