Mature Life Features

Cecil Scaglione, Editor

Inept Financial Planner as Bad as a Crooked One

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By Cecil Scaglione         

Mature Life Features

Financial losses perpetrated by crooked, self-serving, and inept financial planners have been estimated to total at least $1 billion a year in this country. Retirees account for the bulk of this loss.

That means it’s up to you to establish, maintain and monitor open lines of communication with the financial experts with whom you deal, including your tax preparer, stock broker, financial planner, accountant, insurance agent, and attorney.

It’s unfair to assume any of these are out to defraud you. It’s also unrealistic to expect any or all of them to be professional or prescient enough to assure you of the safest and surest financial road to the future. In other words, you have to assume responsibility for your own wealth and welfare.

Most retirement income is commonly likened to a three-legged stool. One leg is Social Security.Another is made of company pensions. The third comprises personal savings and investments. You have the most control over the last. And this is where you need the most help from financial planners. Unfortunately, there is no sure way to seek and select such consultants who are competentand trustworthy.

Referrals, therefore, are probably your best source. Check with your colleagues and neighbors and relatives and then do your own background checks of the names  you get. You can simplify your search if you know your retirement needs. The rule of thumb is that you need an amount equal to 70 percent of your pre-retirement earnings to maintain your standard of living when you no longer are working.

Social Security has been paying an average of 40 percent of pre-retirement income. If your employer’s pension plan pays out an almost similar amount, then you should have little to worry about, other than the fact that the fund could dry up. If your company plan falls short — or if you have no retirement income coming from employers because you may have changed jobs a few times — you have to establish alternative sources of income to supplement your anticipated Social Security checks. There are many investment avenues to explore: individual retirement accounts, 401(k) programs, profit-sharing plans, annuities, the stock market, investment clubs, mutual funds, insurance trusts, and real estate, to mention a few.

If you haven’t taken any fiscal steps on your own, you’re part of a large club. More than half of Americans have not put aside any money for retirement. At the same time, the need for more retirement income is growing because the average worker now lives about two decades after retiring. So, armed with the knowledge of what you’ll need if you quit working at 65, you can then search for a financial planner who understands your needs and your situation and is willing to listen to your thinking to help position yourself in the most secure financial niche available.

You’ll also recognize more readily whether he or she is more interested in generating transactions (and commissions) for himself or herself, is a sleazy scam artist, or just plain lazy.  It’s never too late to begin this process. Even if you’re already retired. There’s plenty of free information and advice on the Internet to get you started.

Mature Life Features, Copyright 2002

Written by Cecil Scaglione

September 7, 2011 at 12:05 am

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