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Joe Lucey

The Importance of a Financial Strategy

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Like a life plan, a well-thought-out financial strategy helps keep us on track and working toward our goals. And pursuing our financial goals goes hand in hand with working to achieve our life goals. For instance, if you have a specific retirement date in mind, creating a financial strategy can help you plan for that date and see if you are on track to meet your goals.

Here are three reasons you should implement a financial strategy:

  1. It shows you whether your goals are realistic. Taking stock of where you are and where you want to be can help identify gaps and highlight potential shortfalls. Remember that specific retirement date you had in mind? A financial strategy can tell you whether that date is feasible or not.
  2. It’s a port in the storm. It’s easy to stick with a strategy when things are good, but when things get challenging, it’s tempting to jump ship. A well-thought-out strategy will help act as an anchor for you when you have an unexpected event take place.
  3. It helps you understand where your money goes. While some of us are good at following the money, some of us have no idea what we really spend our money on. Part of putting your financial strategy together is sitting down and accounting for your expenses.

We can help you create a financial strategy that helps you work toward your goals — just give us a call and we’ll schedule a meeting.

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Help Stay on Course with a Life Plan

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Have you ever looked at your life and wondered, “How on earth did I end up here?” It’s probably happened to us all at some point. Author Michael Hyatt refers to it as drift: wandering so far off our original course that we don’t recognize where we are anymore.

How do you help avoid drift and live a life that stays on its intended course? One way is to create a life plan — a road map that spells out where you want to go and how you want to get there. A life plan helps us determine who we currently are and who we ultimately want to be.

It’s important to remember that a life plan is never set in stone. Events such as job loss, sickness and the death of a loved one can unexpectedly alter a life plan. Our life plans may also change as we change as individuals. In these cases, a life plan can help us in two ways: It can help us get back on course toward our destination after a detour, or it can help us chart a new course entirely.

What should a life plan look like? It depends on you. Every life plan is personalized and individualized. In a marriage or a family, you may have overlapping items in your life plans, but each individual will have specific, unique items in his or her plan.

Your life plan can be as complex or as simple as you want it to be. However, here are five steps you can follow to create your life plan:

  1. Assess the current situation. Where are you currently in your work, family, personal life and spiritual life? In what areas are you satisfied or not? 
  2. Choose your top priorities to focus on. It’s best to focus on four to five priorities; any more than that, and our attention gets too scattered. 
  3. Begin with the end in mind. Consider the priorities you chose in step 2. What are your ultimate goals in each of those areas? Write them down.
  4. Break it down. Now that you know where you want to go, it’s time to figure out how to get there. Break your ultimate goals down into smaller steps. How many steps is up to you; you can break goals down into annual, monthly, weekly and even daily goals.
  5. Get to work. Once you’ve set your destination, it’s time to start working toward it. If things start to feel off course, remember that your life plan is a flexible guide, not a directive set in stone. As you work through your mini-goals, new opportunities may arise for you to add to your life plan.

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Innovations in the Baby Boomer Tech Market

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Today, technology companies boast a rapid-fire pipeline of new innovations designed to help consumers in the home environment. While many are designed to help elderly people around the house, in some cases, it’s boomers who buy, install and help monitor those devices for their retired parents.

The baby boomer generation is the fastest-growing segment of technology consumers. Various technology applications have made it easier for them to juggle family and career responsibilities while also keeping track of elderly parents. It’s a good thing, then, that boomers control 70 percent of disposable income spending decisions and, collectively, are expected to inherit more than $15 trillion over the next 20 years.

Boomers also will be the first generation to fully benefit from high-tech age-at-home innovations. These range from home stair lifts to wearable fitness devices that transmit data directly to their electronic health records to GPS-based devices to track when the dog escapes the backyard. While the downsides of aging are often emphasized, technological advances have the potential to provide more conveniences for boomers going forward.

What Is Evidence-Based Investing?

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The evidence-based approach originated in the medical field to promote the use of clinical experience and the best available research to make decisions about individual patient care.

In the investing world, this translates to a goal of using current evidence to help maximize an individual’s investment returns while minimizing risk from market downturns. In more simplistic terms, evidence-based investing (EBI) means that whatever you decide to do, make sure you have an evidence-based reason for doing it, and always be prepared to amend your plan when the evidence necessitates a change.

While we’re happy to explain to our clients various investing and wealth management approaches, including EBI, please keep in mind that our advice is tailored to each person’s needs. What works for one client may not work as well for another. We’d love to talk with you about our individual approach to investing – give us a call, and we’ll be happy to set up an appointment.

Financial professionals who use evidence-based investing typically take a four-step decision-making process:

  1. Eliminate meaningless questions.
  2. Ask meaningful questions.
  3. Apply the evidence.
  4. Monitor for effectiveness.

Another significant distinction about EBI is that it is commonly misinterpreted as passive investing. However, EBI is not so much about active versus passive management but rather is about keeping an eye on how much you pay for each investment and determining if what you’ve gotten in return is worth the price.

Please remember that investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Keeping Connected With the Ever-Changing Internet

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If you’ve watched national news in the past year or two, you’ve likely heard debates about net neutrality, which is the principle that internet providers should allow access to content regardless of the source and without blocking certain sites.

In the waning days of the Obama administration, the Federal Communications Commission passed a rule preventing providers such as Comcast and AT&T to monitor each person’s internet browsing history and sell that information to other marketers without their expressed permission. Under the Trump administration, Congress has since reversed that ruling.

This debate is important for both internet users and companies for vastly different reasons. Regardless of the direction this issue takes moving forward, the internet will continue to be an influence in the way we obtain and share information in the future.

As a result, privacy and security concerns are critical, especially with regard to our financial accounts and transactions. The ransomware attack “WannaCryptor,” which affected Great Britain and other countries in May, was an unpleasant reminder of how important it is to keep software programs current by installing updates as they are made available.

As financial professionals, our priority is keeping a close eye on your finances to help ensure you’re utilizing the optimal products and strategies to work toward your goals. Now more than ever, this requires monitoring the latest technology, because as the world changes, your needs may change with it.

One shift in the tech world is the continued emergence of the Internet of Things (IoT). Companies are projected to spend upward of $5 trillion on the IoT during the next five years. These “things” include a wide range of products and services, from “dashboards” – which are information displays that enable users to conduct a multitude of internet transactions via one control center – to “remotes” such as smartphones and connected TVs.

An interesting component of the IoT is that the more applications are developed, the more vulnerability users are exposed to for security risks. From the perspective of a user, whether that’s an individual or a company deploying an enterprise-wide software program, this may pose a financial threat.

However, from an investor’s perspective, the IoT offers a wide variety of opportunities, such as companies that develop sophisticated internet software and others that specialize in IoT safeguard technology.

Savings and Investment Updates

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The American College of Financial Services recently posted some surprising results from its Retirement Income Literacy Quiz. Nearly three-quarters of respondents ages 60 to 75 failed the test with a score of 60 percent or less.

The quiz included topics such as which expenses are covered by Medicare and long-term care insurance and what age people should start drawing benefits from Social Security. If you’re not familiar with the answers to questions such as these, we invite you to schedule a consultation so we can help you delve into retirement planning. There are many factors to consider beyond where to invest and how much you’ve saved. Retirement is about preserving and distributing assets, as well as understanding the impact of longevity.

Let’s take a look at some other retirement-oriented questions that are important to answer. For example, do you know how long you have to work for your company before you can keep matched contributions to your 401(k) plan? Some companies that sponsor a 401(k) require employees to work around two to three years before employer-matching contributions are vested. If you leave the company before then, those matches won’t be added to your account balance — even if you maintain the plan with that employer after you go to work for another one.

It’s worth noting that 401(k) and other employer-sponsored retirement plans may be considered for tax reform. Recent discussions have included eliminating the tax-deferred status of retirement plan contributions, which represent a four-year tab of $583.6 billion that Congress could spend elsewhere. The discussions are in the very early stages, but things can happen quickly in Washington these days, so it’s an issue worth watching.

For those in the military, on Jan. 1, 2018, the military’s new Blended Retirement System goes into effect. Starting that day, all military personnel whose length of service spans one to 12 years will have one year to make an irrevocable choice between the old and new retirement plans. Service members who started before 2006 will automatically remain in the old plan, which offers a generous pension complete with inflation adjustments. However, anyone joining the military starting next year gets enrolled automatically in the new program, which combines reduced pension benefits with up to a 5 percent match of personal contributions to the government’s Thrift Savings Plan (TSP).

If you haven’t saved enough money to retire yet, you may be thinking you’ll just keep working until you have enough. However, according to a recent survey of 1,002 retirees, 60 percent said the timing of their retirement was unexpected, citing reasons such as health issues, job loss or the need to care for a loved one. While working longer is a worthy goal, it’s good to develop a financial plan that helps provide for possible contingencies just in case you have to pivot to “Plan B.”