Stay on Top of Your Finances

 Stay on Top of Your Finances

So we’ve discussed the benefits of financial education and offered some helpful resources. But what’s involved with putting that knowledge into action? Plus, what does someone do once they’ve created a financial plan?

Ultimately, securing your financial life now and in the present doesn’t consist of just education and planning. It also requires sticking to your plan. Nor is it a course you must complete alone. A financial professional will help with evaluating your needs, goals, and determining the best financial vehicles to achieve them. If adjustments are needed over time, your advisor can also assist you with examining your options.

To put it in a nutshell, a financial journey is a long-term process. It’s a matter of timely checkups on your portfolio’s performance, continuing education, and careful evaluation of evolving life goals and objectives. To that end, it’s critical to stay on top of your finances over time for best results. Here are a few concrete steps to consider in order to maintain long-lasting financial well-being.

Some Critical Steps to Cover

Evaluating your risk tolerance – In investing circles, “risk tolerance” refers to someone’s ability to accept the instances when the value of their investments takes a large nosedive. In short, it’s a term for describing an investor’s ability to weather large investment shortfalls and not sell off before their investments regain their value or achieve new heights.

Needless to say, risk tolerance will differ from person to person. You’re also not likely to have the same risk tolerance throughout your life, nor is it advised you have the same appetite for risk long-term. The amount of risk your financial portfolio contains should correspond to your stage in life. If you’re getting close to retirement age – or if you’ve already reached it – should your investments decline in value, you don’t have as much time for recovery.

Avoiding overreliance on your advisor – A financial advisor is a helpful partner in your journey. Their knowledge of different markets and products will be a great complement to finding the best solutions for your needs. But it’s important to ensure you balance their expertise with your own knowledge and direction.

If you don’t take steps to fully educate yourself, you leave yourself open to over-direction from a financial professional – or even misguidance. That isn’t to say most advisors will take a less-than-ideal approach, but it shouldn’t even be a possibility. To that end, you should ask your professional the right questions to learn of their expertise and philosophy before engaging their services.

Being ready for adjustments – As we discussed above, risk tolerance is a factor which will change over time. But finances involve more than just the risk of investment value decline. There are the events of market downturns themselves. When someone is aging, a market correction can mean years for investments to regain their value – precious time a person simply doesn’t have.

The 2008-2009 financial crisis brought severe adverse effects on Americans’ financial assets. Just the S&P 500 alone experienced a 37% decline between December 2007 and December 2008, which resulted in retirement account losses of $2.8 trillion (almost a 33.3% dip in value). Then there’s the recent market correction which came about from a decline in China’s manufacturing and a dip in a Chinese equity index’s performance. When your assets are at risk of notable losses in the later years of life, being prepared to reallocate them is an important step. Close monitoring of your finances – and having an appropriate asset allocation for your retirement financial and income goals – is key.

Have Questions?

In time for National Financial Literacy Month, has partnered up with the Society for Financial Awareness (SOFA) to publish helpful resources for financial education. Please use these resources for your enrichment.

If you’re ready for personal attention with your retirement future, can help you. Use our Find a Licensed Advisor section to connect directly with an independent financial professional, and to request a personal strategy session to discuss your needs and goals. And should you have any questions or concerns, call 877.476.9723.

Author: Super User

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