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Category: 401k

1 thing every investor should do today

What’s the one thing you should do today?

Review your beneficiaries on your IRA’s, Roth IRA, 401k/403b, life insurance policies, and annuities.

You really want to do this. Why? Because you want to make sure that whoever is supposed to get the money, actually gets the money. Here is where I insert a sad story…

Several years ago in New York there was an older couple. The wife worked for the school system her entire life. She had a million dollars in her retirement account. When she started working for the school system, she was very young and hadn’t met her husband yet. She had made her mother and her sister as beneficiaries on her school system retirement account. Many years later, the woman passed away. She had forgotten to change her account to have her husband as the beneficiary. The woman’s mother was long deceased, but her sister? Well, the sister was a million dollars richer, and the husband didn’t get a penny. He had the school system review all documents to see if it was a mistake. It wasn’t. He and his wife had planned for that money for their retirement, but her simple error of forgetting to change her beneficiary decimated her husband’s retirement. Ouch.

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management and a financial advisor in the LGBT community.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL Financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

photo credit: Images of Money

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Why dollar cost averaging can be your best friend

What is Dollar Cost Averaging?

As an LGBT focused advisor, I get many questions about investing money each month to seek growth of your wealth. Dollar Cost Averaging is investing equal amounts of money into an investment over a period of time, and may be just the investment plan you need.

For example, let’s say that you want to contribute $12,000 into an investment account. You can deposit the $12,000 all at once. Another option is to Dollar Cost Average and invest $1000 each month.

Why not invest all at once?

For starters, most people aren’t very good at saving up a big sum of money then writing a check. Something always seems to come up and their money gets diverted to something else. That’s a pretty easy way to have your financial goals get off track.

If you set up your bank account to automatically have money sent to your investment account each month, then you don’t have to worry about writing that check. It’s done. Finished. Invested. A beautiful thing. Odds are that you going to “set and forget” and not notice the money being transferred.

Dollar Cost Averaging helps to stabilize your investments during a volatile market

Sometimes the market is up, sometimes the market is down. Sometimes your investment is up, sometimes your investment is down. If you invest some money each month, you are going to buy at both the lows and the peaks. It normalizes over time. That’s where the name Dollar Cost Averaging comes from. Your investment purchase price averages out over time. Actually, if your investment is going up over time, the price will go up over time. But when the market dips, you wouldn’t have put all of your money in at the high just to watch it drop.

How to get started

It’s easy! Most investment management firms, including mine, can set up DCA program for you. We can help you pick the right investment(s). You can pick the amount and the day of the month to invest. Then just watch your nest egg!

*Note – not all investments are available for dollar cost averaging. Some investments have a minimum amount to start, then you can DCA after the initial purchase. Please talk to an advisor for more information.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. Sharon.herman@silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor. Silver Key Wealth Management is a separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

photo credit: Robert Donavan

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2014 Top 5 Businesswoman of the Year Award

Thanks Tampa Bay Business Journal! You made Sharon Herman one of the top 5 Businesswomen of the Year for 2014 in financial services!

We appreciate the recognition and support the community gives us.

Award is based on community volunteerism, business principals and customer satisfaction.

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5 Common Retirement Planning Mistakes

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There are five common retirement planning mistakes that many people make

Train 

Train Wreck!!
Photocredit: Tom Brandt

1.    Changing investment strategies based on emotions.
It never feels good when the market goes down. And seeing your account value go down is never pleasant. The emotional side of you wants to stop the pain. In other words, pull your money out of the market. Then when the market goes up, you want to be a part of the party and put money in! Analyze what you are really doing when this happens. You are selling an investment low, then buying it back when it costs more money. Does that make sense? Would you sell your house when the price went down and then buy it back when the price went up because it was worth more? No. No you wouldn’t do that. So why do that with good investments?

2.    Not being honest about retirement costs
I see this all of the time. People want to retire so much that they choose to tighten the belt when they budget for retirement.  They hack things out of their life right and left on paper. Then they try to live it and find that the parameters are totally unreasonable. If you like to travel, then you like to travel. If you like to golf, then you like to golf. Don’t stop working too early just to be done, then punish yourself for the rest of your life. A few extra years of work may make the difference between having that annual vacation for the next 20 years or not. Think about that.

3.    Not starting to save early enough
Don’t be this person! By saving earlier in life, you don’t have to put as much away each year to reach your retirement goal! All due to the magic of compounding.
Starting at age 25, if you invested $3500 a year at an 8% return, you would have over $1,000,000 at the age of 65. That’s it! Only $3500 a year!

If you wait until age 45 to start saving, then you have to invest $20,000 a year for 20 years to get a million dollars. That’s quite a difference. Don’t ignore the power of compounding. This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.

4.    Not practicing good asset allocation
You need to spread the love in your portfolio, so to speak. Putting all of your investment dollars in one basket is never a good idea. This year’s hot performing asset class might be next years worse. Seek balance in all you do, including investing. Consider seeking the help of a financial professional for advice. Asset allocation does not ensure a profit or protect against a loss.

5.    Leaving your 401k behind
You got a new job. Yay for you! Don’t forget about that 401k that’s been sitting there. You took the time to invest in it. Take the time to explore your distribution options. You can be losing out on the opportunity to grow your nest egg if you ignore your money! A good retirement plan is like a garden. It needs to be tended to and watched over to thrive.

 


 

Sharon_Herman_HeadshotSharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial, the largest independent broker/dealer* in the United States. www.silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment advisor and separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

*Financial Planning Magazine (June 1996-2013 based on total revenue)

 

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