麻豆传媒

Take emotions out of retirement planning

It鈥檚 hard to prevent money matters from feeling personal 鈥� after all you鈥檝e worked hard to save for retirement. But removing emotions from financial decisions can help set you up for future success.

鈥淚f you are watching the markets every day, it can put you on a roller coaster ride of ups and downs,鈥� says Bryan Kuderna, a certified financial planner with the Kuderna Financial Team in Shrewsbury, New Jersey, and the author of Millennial Millionaire in an interview conducted by 麻豆传媒. 鈥淎nd when that happens, you tend to make bad decisions with your money.鈥�

The last thing you want to do is act irrationally and jeopardize the future you鈥檝e planned for. That鈥檚 why Kuderna and other financial experts will tell you the same thing: Worrying about current events, policy changes and other moves that cause markets to fluctuate does more harm than good.

The best defense against your emotions is to stick with a solid long-term plan. Follow these easy strategies to help your plans stay on track for the future.

Work with a qualified financial professional

Enlisting the help of a financial professional gives you a teammate who鈥檚 not only looking out for your money, but can also take emotions out of the equation. While you should regularly check in, there鈥檚 comfort in knowing that they are helping ensure that your retirement plan aligns with your goals and objectives, even as those goals and objectives change.

Log on less

Frequently checking your bank and credit card accounts online is a smart move, but the same advice does not hold true for retirement accounts. 鈥淵ou shouldn鈥檛 sign in every day,鈥� says Kuderna. "Instead, look at your statements once a quarter to see how your money is moving over time."

Don鈥檛 put all your eggs in one basket

鈥淥ne of the biggest flaws I see in retirement planning is when people commingle all their assets in one account,鈥� says Kuderna. 鈥淲hen you do that, it鈥檚 easy to get emotional. If that account suddenly goes way up, you get excited, but if it goes way low, you panic.鈥� The better play: Distribute your assets into three distinct portfolio categories.

The first is for the period immediately after you retire, a five-year stint Kuderna dubs the 鈥済o-go years.鈥� 鈥淭hat鈥檚 when you鈥檙e most active and using a lot of your assets because every day is like a Saturday,鈥� he says. 鈥淪o we鈥檒l be very conservative with that money, since it鈥檚 essentially working capital for five years. That account is much more stable, slow and steady.鈥�

The next basket is for the 鈥渟low-go years,鈥� when you aren鈥檛 as active and therefore don鈥檛 spend as much money. 鈥淭his is the cheapest phase of retirement,鈥� Kuderna says, 鈥渟o it鈥檚 where we鈥檒l have a flex basket that鈥檚 moderately invested. If the markets are going up and down, you don鈥檛 need to worry because you鈥檙e not going to tap this account for at least 5 to 10 years.鈥�

Then there are the 鈥渘o-go years,鈥� when you鈥檙e deep into retirement and your expenses drop but medical costs may rise. 鈥淲e take a very long-term approach to this investment,鈥� says Kuderna.

鈥淲hen you have these different pockets of money you can tap into,鈥� he concludes, 鈥渋t allows you to take advantage of any dips or rallies in the market on your time and your terms rather than be reactionary.鈥� That鈥檚 the power of having a plan.

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