Planning for retirement in a volatile economic environment can feel overwhelming. With inflation affecting the cost of everyday goods and geopolitical conflicts making headlines, you might be wondering how to best protect the savings you have worked so hard to build. Understanding how your money is being managed and knowing the true value of your financial advisor could be the most important steps you take toward a more secure retirement.
Many people look at their bank accounts and make major financial decisions based solely on the last number they remember seeing. However, that number is constantly changing. To effectively plan for your future, you should have a written, concrete budget. Once you know what you truly have left over each month, you can start making informed decisions about your portfolio.
If you decide to hire a professional to help manage your money, you must ensure you are actually getting value for the fees you pay. Some investors believe they can manage their portfolios on their own, but if you recognize that market volatility poses a threat to your retirement, you might want someone who is actively monitoring your accounts. A buy-and-hold strategy may not always be sufficient. We believe that an active and tactical approach to portfolio management could help you navigate unpredictable markets. This means having a proactive plan in place to sell assets when necessary, not just a plan to buy.
Furthermore, it is vital to know if your advisor is a fiduciary. A fiduciary is legally obligated to put your financial interests ahead of their own. Surprisingly, not everyone who offers financial advice is held to this standard. By working with a fiduciary, and by utilizing the expertise of a Chartered Financial Analyst, you could position yourself to better manage your sequence of returns risk. Ultimately, the goal might not be to simply beat the market, but rather to lose less during market downturns.
If you might have questions about how this applies to your retirement plan, our team is here to help.
Key Takeaways
- Creating a written budget could provide a much clearer picture of your finances than simply guessing based on your current bank balance.
- Paying an advisor fee should directly correlate with receiving active value, such as tactical management during market volatility.
- Working with a fiduciary ensures that the professional managing your money is legally bound to prioritize your best interests.
- Minimizing portfolio losses during economic downturns may be more effective for your long-term stability than constantly trying to achieve the highest possible return.
- Having a proactive strategy that includes knowing when to sell assets might help protect your retirement savings from sudden market shifts.
Fitzwilliams Wealth Management, Inc. is an SEC registered investment advisor. FWM and Fitzwilliams Financial are affiliated companies. Registration does not imply a certain level of skill or training. The information contained herein is for informational purposes only and should not be construed as personalized investment advice, a solicitation, or an offer to buy or sell any security. Individualized investment advice can only be provided after entering into an advisory agreement. Fitzwilliams Wealth Management, Inc. does not provide tax or legal advice. Please consult your tax and/or legal professional regarding your specific situation. Media appearances are for informational purposes only and do not constitute an endorsement. Investing involves risk, including the potential loss of principal.