It’s time for another mailbag episode, where we sit down and answer your questions about finances, investments, and retirement planning.
Rolland asks, “What rate of return should I be getting on my investments these days? I haven’t been too pleased with my accounts for the past several months.”
There are two sides to returns: how much you need for your plan to work and what your risk tolerance level is. Averages are already a tricky thing; we get a sequence based on whether markets are up and down. Just because you’ve been used to an 8% return the past decade, doesn’t mean your plan is in trouble now.
The past decade we’ve gotten used to good returns, but that’s not always how markets work. We try to build a plan based on your comfort level and your rate of return should reflect that.
Joslin says, “I have a lot of blue-chip stocks like Coke, Procter and Gamble, and GE. I’ve been told I should find different investments as I get closer to retirement. Do I have to make these changes?”
This comes back to risk and your tolerance level. Having all of your money in stocks is dangerous. But they can also be good investments for the long-term. You probably don’t want to get rid of everything, however, we also want to make sure you’re diversified going into retirement.
June writes, “I’m a federal employee and I have a nice pension once I retire next year. Should I keep the money in my TSP invested there or maybe move it somewhere else?”
First of all, have a plan and understand the income you need and where you’ll draw that income from. Look at the investments and where they’ll fit. You need to have a plan first and then we can decide whether a TSP is a right fit for you.
Join us today as we break down these questions and more from our clients and listeners!
[1:29] – What rate of return should I be getting?
[5:02] – Should I move out of blue-chip stocks?
[8:22] – Should I move the money in my TSP?
[11:49] – Is it time to load up on stocks?
[16:24] – Can I make it the rest of the way without an advisor?
A Quotable Moment:
“It comes down to those two points. What do you need in the plan to make it work and then what are you comfortable with? Everyone is really comfortable with risk when everything’s going good.”
-Phil Putney
