“I like taking something that is complicated to a lot of folks and breaking it down into an easily digestible way,” Yu said. “That’s why I am in this role today. I want to help in any way I can.”
Yu said that long-term financial plans shouldn’t change as people reach their 60s and 70s because people should continue to save through retirement.
“With aging there is a cost to health care, and I think that can be a bit of a surprise,” Yu said. “As people get older illnesses occur and their health sometimes deteriorates. People tend to be on medications, or may not eat as well or move as much. The cost of health care tends to increase. Long-term care can affect the overall financial picture.”
So how does someone know if they are financially secure enough to retire? Yu advises controlling debt, as well as planning for a fixed income.
“Work with a financial adviser who can help plan out their retirement and what it looks like as far as understanding their expenses, incomes and goals,” Yu said. “It’s not about having ‘X’ amount of money. It is creating different streams of income to support expenses.”
It is also important for people to consider the hidden costs of daily living.
“People should be prepared for inflation, which can be sneaky,” Yu said. “It’s something you don’t see but you can feel. Your own personal economy can be affected by inflation. Saving and investing and earning enough to keep up with inflation or exceed inflation – that is where investments can help individuals prepare.”
Retirement preparation includes not only health considerations, but also proper tax management.
“At age 73 there is a requirement minimum distribution, and people have to withdraw a certain amount of their IRAs and pay taxes on it,” Yu said.
She advises that the best way to combat financial issues is to have a plan. Yu recommends that people have a goal and know what it means in dollars. It could be putting kids through school or a vacation home. It helps to strategize to reach that goal.
For Yu, the financial world must include personal relationships.
“It’s important to find someone you connect with and someone that cares about each situation,” she said. “All advisers are a little different and it’s important to find someone who care about them and their family and financial situation, because it goes hand in hand. I hope when people meet me, they can see my sincerity.”
Here is other advice from Yu.
How can people best be prepared for retirement: A few ways people can be best prepared for retirement is using time on their side to maximize compounding interest, take advantage of an employer 401K or similar tax advantage retirement plan, and reviewing your accounts on a regular basis.
Biggest financial challenge for senior citizen: The biggest financial challenge for seniors is the increase in health care costs. If properly invested over time, individuals can keep up with ongoing inflation. Taxes can be mitigated with proper tax management planning, but health care is one of the biggest factors. As individuals age, people should plan for long term care costs. Eventually, at some point, most people will need long term care assistance. If there were such a need, depending on the various services, this can create a large expense that could impact one’s financial picture.
How can people combat any financial issues? Benjamin Franklin once said, “If you fail to plan, you are planning to fail.” Establish and quantify your goals. You may have a short-term goal of vacationing abroad or having a long-term goal of what retirement looks like to you. Identify your goals and place a “price tag” on them so it’s quantifiable. Then, create an investment strategy to achieve your goals. Now that you have an idea of how much your goals will cost, you can create the appropriate savings and investment strategy needed to help you reach those goals. Control your debts, especially the ones with high interest rates. This could free up some cash to help boost your savings and investments. Prepare for obstacles by building an emergency fund of several months’ worth of living expenses. This can help pay for unexpected expenses, so you won’t have to touch your long-term investments. Review your strategy on an ongoing basis to ensure that your investment portfolio is still meeting your plans.
Best advice for individuals 60 and older: Work with a financial adviser you trust. Financial advisers can help develop a personal, long-term financial strategy to help individuals reach their important goals. They can also assist in avoid mistakes, such as attempting to “time” the market. In theory, it is a great idea to “buy low” and “sell high” but it’s nearly impossible to predict the lowest point or highest point of a stock price, for instance. Financial advisers can also guide individuals to continue adding to their retirement savings to help pay for the potential two or three decades of active retirement.
Do you offer any financial programs or classes for people 60 and older: We offer various workshops throughout the year. Some are specifically geared for those who are 60 years or older. Please reach out to our office to check on any upcoming courses.
Tips for healthy finances
- Develop your strategy to determine what goals you would like to achieve. The strategy should be based on your long-term goals, length of time to invest, your comfort level with risk, and steps required for you to get there. Be specific because your strategy can serve as a guide to help you stay on track.
- Understand the “risk versus reward.” Typically, risk and return go hand in hand. The higher the return potential you would like to see, the more risk you take. But don’t lose sight of the biggest risk you face when it comes to investing is to not reach your long-term goals. There are several types of investment risks, such as economic, inflation, and interest rate risk to name a few.
- Diversifying in various asset classes such as stocks, bonds, cash, and international investments provides a foundation in a portfolio that allows a less volatile ride over a long period of time.
- Stick with quality investments. For stocks, we look at the earning growth of a company along with dividend growth over time. For bonds, one measure of quality is an “investment grade” credit rating which indicates the borrower has a good history of making the principal and interest payments back.
- Investing for the long term can help investors avoid “timing” the market.
- Set realistic expectations of what you are trying to achieve and track your progress.
- Maintain a balance. Like many things in life, balance is so important to maintain. Keeping your investment balance with the appropriate allocation allows you to remain in line with your objectives.
- Prepare for the unexpected. Unforeseen events can happen. Although you cannot predict what will happen in the future, but you can prepare for it.
- Focus on what you can control. When investing, there are things that you can’t control. For instance, the day-to-day market fluctuations or the economy or the political environment that is occurring all around us. What you can focus on are the time-tested investment principles, such as diversifying your portfolio, own quality investments, and maintain a long-term perspective.
- Review your strategy regularly because your goals will change over time as life events occur. Whether that be a new job or an addition the family or retirement, your strategy will need to adapt.
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