On an average working day, we field at least a dozen phone calls from clients with questions about their financial lives. So we present to you our top 5 most frequently asked questions, in no particular order:
- When should I begin taking Social Security? Like the answer to many questions, the answer is it depends. From a pure numbers standpoint, the longer you can wait before taking Social Security the better off you’ll be. For every year you wait beyond your full retirement age 66 for most, you’ll get an annual bump of 8%. Two reasons for taking it early would be if you need the income to live on or if your life expectancy is relatively short. Age 62 is the earliest you can claim, but your benefits are reduced by 25% from your full retirement amount. Delay until age 70 if you can. For advice specific to your situation, enlist our help in figuring out how you can maximize your SS benefits. Each situation is unique.
- Do I have enough to retire? Again, the answer depends. Our initial response is to update your financial plan. If you don’t have one, the first step then is to do one. In lieu of a financial plan, we can do some simplified projections to give you an idea of how things may shake out. Oftentimes, when we tell a client they have enough assets to retire they choose to continue working, content with the knowledge they can walk away when they want. There’s nothing like having that financial freedom. If this is a question you’ve been pondering, ask us to help. Existing clients won’t get a separate bill from us for our financial planning services.
- How do you invest your own money? Prospective clients typically ask us this question and we love getting it. The answer is that we buy the same individual stocks, bonds, mutual funds, and ETFs for our own accounts as we use in your account. You can’t trust a skinny cook and you shouldn’t trust an advisor who doesn’t eat their own cooking.
- Why not just invest in S&P 500 stocks? Ten years ago, it was “why don’t I have more foreign stock exposure?” Twenty years ago, it was “I want more technology stocks!” Investors always want to buy what’s leading the pack and what’s working now. This is called performance chasing. Here’s a great chart that serves as a reminder of why building a diversified portfolio with a variety of asset classes is preferable to owning just U.S. large cap stocks or the investment du jour. See also why we build diversified portfolios.
- What are you telling clients now who are nervous about the market at all-time highs? After the market has had a good run, as it has since the election, we inevitably get this question. Just because stocks are at all-time highs doesn’t mean they are drastically overvalued. In fact, multi-year highs have a strong history of predicting further gains in the market. Record highs come in bunches. Stay the course.
What questions do you have that we didn’t cover here? We’d be happy to answer them for you. Connect with us here!
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