Westchester County Business Journal Q&A from the Corner Office
Q&A from the Corner Office
There are new rules in retirement planning. A fluctuating stock market directly impacting 401(k)s and long-term savings leaves many scratching their heads. Rather than freezing from fear of doing the wrong thing, Andy Wigzell and Jennifer Polla, financial planners at Barnum Financial Group in Shelton, an office of MetLife, answered this week’s question.
Q: What qualifies for smart retirement savings in the recession?
Wigzell and Polla: “First, start with a game plan and stick to it. Having preset guidelines that recognize the potential for turbulent times can help prevent emotion from dictating your decisions. Having a well-diversified portfolio may not ensure a profit or guarantee against a loss, but it can help you understand and balance your risk in advance.
“Second, know what you own and why you own it. Understanding how a specific holding fits in your portfolio can help you consider whether a lower price might actually represent a buying opportunity.
“Third, mind the gap. Spend the time to determine what your income needs will be in retirement. Factor in anticipated costs relating to basic needs, housing and health care. By the time you retire, you’ll need a nest egg that will provide you with enough income to cover what Social Security will not.
“Fourth, use cash to help manage your mindset. Cash can be the financial equivalent of taking deep breaths to relax. It can enhance your ability to make thoughtful decisions instead of impulsive ones. Having a cash cushion coupled with a disciplined investing strategy can change your perspective on market volatility.
“Don’t forget to pay yourself first. Fully utilize any company sponsored 401(k) plan or your own Individual Retirement Account (IRA). The potential tax savings can significantly reduce your overall tax bill.
“Get help. Retirement calculations have many moving parts and the consequences of mistakes are too serious to go it alone. Consult tax advisors and financial planners who can aid in your journey.”
The Web site is barnumfinancialgroup.com.
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