What Triggers an SOS in Your Finances?

How do you know when it’s time to seek help managing your investments?

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People often make the decision to manage their own investments, but should they? What triggers someone to decide that things are too complex for them to continue? For one of my clients, it was the realization that they had not satisfied their IRA RMD (Required Minimum Distribution). This may sound simple, but when you have an IRA account at a brokerage firm, some IRA CDs at the bank, and an annuity that you didn’t even realize was an IRA, things can get complicated. Consolidating your assets may help a lot, but you need to be careful. If you don’t follow the rules, it can cost you – big time. Only certain “like” deferred accounts can be aggregated. For example, if you have a 403(b), a Simple IRA, several IRA CDs, and an IRA brokerage account, you can aggregate all the IRAs and distribute the RMD amounts out of one account. The 403(b) is a similar but different type of deferred account and needs to have its own IRA RMD. Consolidation may be the answer, but the logistics of intermingling correctly can sometimes be tricky.

Accumulated cash balances are another area of concern for many investors. Investing the income generated by some accounts is typically overlooked by a self-directed investor. It is amazing to see how much cash can be accumulated in an investment account over the course of a few months’ time, especially in December when mutual fund capital gains are paid. One solution may be to automatically reinvest the dividends, but markets are often cyclical and it is important to take the time to determine when to take profits from one area and when to invest in another. That takes a lot of work which, if ignored, can have serious negative consequences.

For some investors, their SOS signal may simply be when they receive an exceptionally low renewal interest rate on their Certificates of Deposit. Having access to more sources than local banks and laddering maturities may be the answer you need to improve your returns, but these strategies are time-consuming and may be a step beyond most do-it-yourself investors.

These little things can add up to a big difference in your total return. The point here is that somebody needs to be watching the shop. Be realistic about your knowledge, diligence, and willingness to stay on top of your financial matters. Then, if you are unable or unwilling to do the work, seek out help from a professional investment advisor who has your best interests in mind. When you determine it’s time to seek professional advice, make sure you understand exactly what you need and what you are getting. Some advisers are salespeople and some are not. Do the research to know the difference. Rick’s article on Choosing a Financial Adviser may help.

Will Your Money Last Through Retirement?

No one wants to run out of money. But without goals and a solid plan,
how can you know for sure whether you’re on the right track?

Will I be able to maintain my current lifestyle?

What will my monthly income be in retirement?

Can I protect my hard-earned savings and still
have the income I want?

Rodgers & Associates answers questions like these every day.

Get Personalized Answers
2025 Lititz Pike, Lancaster, PA 17601
Phone: 717-560-3800, Toll-Free: 888-876-3437