Every year in January, we try to do resolutions on what we will do for the following year. Since we are half way through the year and your resolutions probably went out the window long ago, let’s try some reverse psychology and resolve actions that you won’t take.
I won’t pay a sales commission to purchase a mutual fund. There are too many good no load mutual funds that you can invest in. If your broker is says there is a 5% load on this fund, take a pass. He is looking for a commission or sales incentive for a trip to Hawaii. Better yet, work with a fiduciary advisor that does not charge sales commissions. The same philosophy goes for 529 College Savings Plan. Just go direct with the State of Nebraska.
I won’t pay over 1% fee to have my investments managed. Financial advisors need to get paid for their advice and portfolio management work, however, they shouldn’t be greedy.
I won’t be sold an annuity. No one ever buys an annuity. Instead the salesperson sells you one and earns a big fat commission on the transaction. If you are going to purchase an annuity understand its features in plain English and how much the commission the salesperson will make. Also, know the surrender fee if you need to change your mind.
I won’t panic at next stock market downturn. Anyone invested in the market needs to understand the up’s and down’s of the market. If you have a long term time horizon for your investments then history shows that the market moves up. However, in the short term the market can move down (remember the 20% decline in December.) If you think you will panic, then have a discussion with your advisor about the proper mix of stocks and bonds in your portfolio.
I won’t check the value of my investments on a daily( or by the hour or by the minute) basis, but I will monitor them. This ties into the previous paragraph about panicking when the market falls. However, it does make sense to monitor your investments periodically to see if they are performing to your expectations and meeting your goals.
I will not take Social Security at 62 without reviewing all of my options. For every year that you do not take Social Security, you will get an 8% raise in the amount of your benefits. Also, there may be strategies to consider when you include your spouse’s Social Security benefits.
I won’t die without a will. No one likes to think about their death, but do you really want the laws of the state to decide where your assets will go or even who will take care of your children. For more reasons read this….Click Here.
I won’t pay extra in taxes. We all must pay taxes each year, but there is no sense to pay anymore than you have to. Have your financial advisor review your tax return to look for various strategies to discuss with your tax preparer on reducing your taxes. Strategies like ROTH Conversion, gifting RMD’s or appreciated stock to charitable organization, tax loss harvesting, using a Donor Advised Fund are a few ideas.