Have you ever heard the following?
- You should be fine withdrawing 4% annually from your investments in retirement.
- It doesn’t make sense to pay off your mortgage when the interest is tax-deductible and you can get a better return by investing your money.
- Take social security as soon as you can so you don’t have to withdraw from the money you have worked so hard to save. Besides, you never know what is going to happen with social security.
- It is better to take a lump sum from your pension plan than to take monthly payments.
- When you’re young you should invest aggressively and become more conservative as you get older.
If so, you have likely been stereotyped. When an advisor stereotypes an investor, they’re not seeing the investor as an individual with a unique appetite for risk, a unique set of financial circumstances, and a unique set of goals. Sure, there are some things common to all investors - such as taxes, inflation, living expenses, and health care. But using only common assumptions and taking common advice without a detailed financial plan that is specific to YOU exposes you and your family to financial failure.
Let’s take, for example, the last statement. In actuality, everyone has an individual tolerance regarding risk and reward that is not necessarily dictated by age. When a person is invested incorrectly, they panic during market swings, buying high and selling low, which can negatively affect their
I want to empower you to recognize and react to stereotypical advice. My future blogs will cover these and more. In the meantime, if you’re looking for advice that is specific to YOU – let’s talk.
Laura Mickels has spent more than 30 years working for investors with both Wall Street and independent firms. CochranMickels Retirement Specialists provides personalized planning and investment services to individuals approaching and in
These are the opinions of Laura Mickels and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.