It’s important to plan for retirement, which is why at Knollmiller & Arenofsky, LLP our retirement planning lawyers are among the foremost practitioners of retirement planning. Some are unaware of the options there are available to fulfill a successful retirement plan. No one can predict the future, however with reliable planning, asset allocation can be the solution to successful retirement planning.
By Mitch Tuchman
The retirement advice industry, like any growth business, is chock full of competitors. People write books offering seven rules, three steps, 10 commandments and so on. What tend to get short shrift, in our view, are the benefits of asset allocation.
The rules you read about are right, in a sense, but they’re also all wrong, too. After all, if someone could tell you with certainty how much money you needed to retire, they also would be implicitly telling you that nothing in the future will change.
You won’t get sick and need care. Your kids won’t seek financial support as adults. There will be neither market crashes nor natural disasters. Inflation won’t spiral out of control. The economy you think you understand today will look and feel exactly the same to you 30 years down the line.
The benefits of asset allocation are that correctly balanced assets tend to fend off these upheavals. Asset allocation keeps you invested regardless of what you might think is the right investing idea now. Which it almost certainly isn’t.
I don’t mean to scare you. Look, it’s scary enough to even ask yourself these kinds of questions. But it’s important to ask, and important to try to come up with some reasonable answers, at least to start. That’s where the benefits of asset allocation kick in big. It allows you to worry less about how you get there and more about taking decisions today to get started.
Fidelity Investments, for instance, recently put a number on retirement: eight. You will need eight times your final annual pay to be able to survive retirement in the most basic way. No frills, just getting by.
That’s a pretty frightening number for most people. Consider a mid-level corporate employee making, say, $48,000 and who essentially ends his or her career at about that mark.
To read more click here: http://www.marketwatch.com
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