By Tim Dierkes, ChFC, CLU, CFP®
Senior Financial Advisor
Trust Liaison Officer
A Retirement Plan That Works
Planning for retirement can be stressful and overwhelming for many people.
The average person is plagued by a barrage of questions:
How much to save?
Where to save it?
How to plan for it?
What to plan for?
A plethora of information has been published about this: just check
out your local book store, pick up a newspaper, surf the internet, or tune into radio and
TV. At the risk of sounding repetitive, I’m going to expand on two areas of related
concern. The first is the transition period between pre-retirement and actual retirement,
which is often overlooked. The second area is the importance of tiered savings and
investments when it comes to setting up your income plan.
First, we’ll touch on the transition period. The actual timeline
will vary for each person, but usually the 12-24 months prior to actual retirement are
extremely critical. What makes this time period important? Because the markets go
through gyrations. For example, you may have $300K set aside to retire on in the next
year, but when it comes time to start drawing income on that amount a year later,
because of market gyrations, you may find yourself with only $200K. Suddenly your
hard-earned retirement plan is not sufficient.
The transition period leads us directly into the second area of
tiered savings and investments. In a perfect society, you would have enough money to
put all of your cash into CDs and live off principle for the rest of your life with
no worry about actual interest rates or inflation. Unfortunately, that’s unrealistic.
Instead, you may want to consider a tiered savings and investment plan that goes
something like this:
- Tier 1: 12-24 months of short term savings, such as cash, money markets, and laddered CDs
- Tier 2: savings and investments needed within the 2-10 year time frame, designed for a tiny hedge against inflation
- Tier 3: investments not needed for more than 10 years, designed for a greater hedge against inflation
(How and when cash resources are transferred between the tiers is, of course, the devil in the details.)
These are not new concepts, but they are remarkably often
overlooked. If you would like to explore these retirement diversification and income
generating techniques, or other equally important alternatives, please consider a visit
with a Texans Financial Advisor today. You’ll probably sleep better for it.
Texans Financial Representatives:
Richard Corbin - Senior Financial Advisor - Austin area - 512.336.4902
Tim Dierkes - ChFC, CLU, CFP®, Senior Financial Advisor, Trust Liaison Officer - Dallas/Ft. Worth area - 972.348.2023
Danny McFadden – Senior Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Christopher Taylor – CFP®, Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Representatives
are registered, securities are sold, and investment advisory services offered through CUNA
Brokerage Services, Inc. (CBSI), member NASD/SIPC, a registered broker/dealer and investment
advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit
investment and insurance products are not federally insured, involve investment risk, may
lose value and are not obligations of or guaranteed by the financial institution. CBSI is
under contract with the financial institution, through the financial services program, to make
securities available to members. FR080720-9C28
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2007: Good or Bad?
2007 seems to be progressing quite well…depending on your point of view, of course.
| The Good |
The Bad |
| If you have invested in accounts that attempt to duplicate broad market indices, then you’ve probably seen really
great returns year-to-date (assuming that the market has not over-corrected by the time you read this article). |
If you are on the savings side of things (such as savings accounts, money markets and CDs), then interest rates
seem to have stabilized, and in many cases are inching downward. |
| If you are on the lending or self-finance side, then interest rates seem to be going up. |
If you are on the borrowing side, then interest rates seem to be inching upward. |
| If you are purchasing anything electronic or PC-related, then you know it seems like prices practically drop
before you can get it out of the parking lot. |
If you buy food and gasoline (and let’s be honest, we all do), then you know the cost of that seems to be going
up, up, up. |
| If you are a farmer growing corn, 2007 may not be so bad. |
But if you are a farmer in debt and your debt is increasing, 2007 may not be so good, either. |
| Unemployment is down, which is good. |
However, low unemployment could mean more money in circulation chasing fewer goods, which causes inflation.
Hmmm, this one may be a mixed bag. |
Alright, so what’s my point?
As a society, we are inundated with news: whether on tv, in newspapers and magazines or on the Internet.
Much of our news is sensationalized for entertainment purposes, though not actually inaccurate in its reporting. But you do
need to keep in mind that there are usually two sides to every story, and more than one point of view. In the financial
world, this is especially true. When it comes to your own financial plans, whether it’s retirement income planning,
educational savings, or investing for your future, you need to bear in mind that everything changes: economic conditions,
investment and insurance products, peoples’ opinions, and individual circumstances. But most importantly, you need to take
into account differing points of view, and where possible, incorporate them into your actual planning. Sound confusing? It’s
really not.
It’s called using the right tools for the right job. Don’t confuse short term savings for
long-term investments, or visa versa (Cardinal Rule)! Remember what asset allocation and diversification is all about in
regards to long-term investing. Remember that everyone is mortal, we all die, and some of us WILL die prematurely, whether
we like it or not. And finally, please remember investment return does not necessarily equate with investor return. That’s a
big one.
Still confused? Don’t be. Come visit with us at Texans Financial and we can show you how to incorporate
divergent view points into a comprehensive plan suitable to your needs. You will be glad you did.
Registered Texans Financial Representatives:
Richard Corbin - Senior Financial Advisor - Austin area - 512.336.4902
Tim Dierkes - ChFC, CLU, CFP®, Senior Financial Advisor, Trust Liaison Officer - Dallas/Ft. Worth area - 972.348.2023
Carol Dozier – CFP®, Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Bill Marley – Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Danny McFadden – Senior Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Christopher Taylor – CFP®, Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Representatives are registered, securities are sold, and investment
advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member NASD/SIPC, a registered broker/dealer and
investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance
products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the
financial institution. CBSI is under contract with the financial institution, through the financial services program, to make
securities available to members. FR060704-B39F
Scams and Other Things That Go Bump in the Night
Who has NOT heard of the Nigerian email scam (or some variation of it)? You know the one where
someone sends you an email or phone call purporting to be in a position to move a large amount of money into the United
States, but needs someone over here to help them arrange it (that someone would be you.) And it will just cost you a little
bit of time and money, for which you will be rewarded handsomely…usually with millions of dollars! Wow! And from someone you
don’t even know.
Or, let’s talk about some of these new get-rich-quick schemes…you know, the ones that promise how to
teach you to be a day trader in the stock or commodities markets, make tons of money in just minutes, and retire to a
lifestyle of the rich and famous. All sold to you by folks who desire to share their years of accumulated wealth of knowledge
for just pennies so that you can be a millionaire in nothing flat.
Or, how about those investments of promised annual returns of 20-50%? Those sure sound good, too, don’t they?
So what’s wrong with this picture? There is nothing new about these stories. They have been around in
one form or another for a long time. We’ve all been warned about them. So what’s changed? Is it the folks pitching the
stories, or is it the folks buying them?
I would suggest that it’s both. And the common ingredient between both parties would seem to be "greed."
Yes, greed on both sides. Now, greed is not necessarily a bad word in itself, though many may argue that point. But it is
definitely a no-no when folks forget to acknowledge its existence and presence in everyday life. And don’t kid yourself…it
does exist. We all have that little itch inside of us somewhere.
I personally have not fallen for any of the above situations (yet, anyway.) But I know several people who
have, or came close to it. The ones who did not were only saved because they checked with other family and friends before
acting on that particular "itch." But they were sorely tempted.
So, the question is, next time someone approaches you with a story of wealth and riches, and that "itch"
begins to tickle you, pretend you are buying a house or asking someone to marry you…sleep on it, think about it, ask your
family or friends about it before deciding on a course of action. You can even call us at Texans Financial to see what we
think about it.
You’ll be glad you did. Don’t get scammed.
Registered Texans Financial Representatives:
Richard Corbin - Senior Financial Advisor - Austin area - 512.336.4902
Tim Dierkes - ChFC, CLU, CFP®, Senior Financial Advisor, Trust Liaison Officer - Dallas/Ft. Worth area - 972.348.2023
Carol Dozier – CFP®, Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Bill Marley – Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Danny McFadden – Senior Financial Advisor – Dallas/Ft. Worth area – 972.348.2023
Representatives are registered through, securities are sold, and
investment advisory services offered through, CUNA Brokerage Services, Inc. (CBSI), member NASD/SIPC, a registered
broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment
and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or
guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services
program, to make securities available to members. CBSI is a registered broker/dealer in all fifty states of the United States
of America. FR040716-CAA6
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