In these uncertain financial times, people may be tempted to make choices with their money and investments that they normally wouldn’t make.
This pertains especially to baby boomers, who are at or nearing retirement. MainStreet put together a list from the experts on 10 things baby boomers shouldn’t consider doing with their money:
Don’t buy what the media is selling: Fear.
Josh Kadish, partner with the Retirement Planning Group in Riverwood, Ill., says that the old quote from President Franklin Roosevelt, “There is nothing to fear but fear itself,” applies to finances. “Fear gets people to tune in, but it affects our behavior,” says Kadish. “It usually gets us to go against the grain of buying low and selling high.”
Do not finance your child’s education with retirement savings.
Alexey Bulankov, a certified financial planner for McCarthy Asset Management in Redwood Shores, Calif., says, “You can finance your child’s education, you cannot finance retirement.” Look into every possible avenue to finance your child’s education, including student loans, grants, scholarships and work internships, which are offered at some private colleges. It’s possible your child may not get to attend the college he/she would like, but it’s important your retirement is not touched. There’s little room for “do-overs” for your financial security at this point, say the experts.
Never give money to an acquaintance who just “got into the business.”
Kirk Shamberger of CK Financial Resources in Colchester, Vt., says this advice is at the top of his list of things never to do. All of MainStreet’s experts agree that you should find a certified financial planner who has been in the business and has a proven track record of helping people at or near retirement age to meet their goals.
Don’t try to catch up by raising the risk level.
With portfolios taking hits amid the market turmoil, many boomers facing emotional distress may be compelled to chase riskier assets classes much in the same fashion gamblers double their bets in attempt to break even, says Guy Penn, principle founder, G.M. Penn Wealth Management in O’Fallon, Mo. “During times of market instability, it is more important than ever to maintain a long-term outlook and stick with a prudent investment strategy.”
Never invest blindly without a true plan.
Kadish says that everyone seems to have a financial planner, but no real plan. “Know your objectives and how much you need to invest to make those goals,” he advises.