Financial Planning with Promark

Withdrawing too much from savings.

Failing to position investments for growth.

A too-conservative investment strategy can be just as dangerous as a too-aggressive one. It exposes your portfolio to the erosive effects of inflation and limits the long-term upside potential that diversified stock investments offer. On the other hand, being too aggressive can mean undue risk in down or volatile markets. What can help: a strategy that seeks to keep the growth potential for your investments without too much risk.

Consider creating a diversified portfolio that includes a mix of stocks, bonds, and short-term investments, according to your risk tolerance, overall financial situation, and investment time horizon. Doing so may help you seek the growth you need in a way that lets you sleep at night. But remember that diversification/asset allocation does not ensure a profit or guarantee against a loss.

Underestimating how long you will live.

As medical advances continue, it’s quite likely that today’s healthy 65-year-olds will live well into their 80s or even 90s. This means there’s a real possibility that you may need 30 or more years of retirement income.

An American man who’s reached age 65 in good health has a 50% chance of living 20 more years to age 85, and a 25% chance of living to 92. For a 65-year-old woman, those odds rise to a 50% chance of living to age 88 and a one in four chance of living to 94. The odds that at least one member of a 65-year-old couple will live to 92 are 50% and there’s a 25% chance at least one of them will reach age 97.

Without some thoughtful planning, you could easily outlive your savings and have to rely solely on Social Security for your income. Chances are, like many people, you don’t have a company pension to rely on – only 30% of Americans today have one. And with the average Social Security benefit of just over $1,000 a month, it likely won’t cover all your needs.