4 Retirement Investing Myths
There is so much misinformation out there about retirement investing.
Now part of it is simply to intimidate you or scare you into whatever product that person is selling, but there are also good people that just get it wrong. Thanks to our YouTube exposure, I have had the opportunity to speak with many of you out there and I have heard my share of myths. Let’s focus on a few today and put these to rest.
Myth #1 — You need to be in index funds to avoid market fluctuations.
We are currently in the middle of one of the longest bull markets in history and many investors have only experienced a straight up market. If you are invested in index funds then you have never experienced a volatile market but I can tell you this, if you are invested in index funds, no matter how diversified you are, YOU WILL not be able to avoid market fluctuations.
The good news is that you likely have a portfolio that can stand the test of time.
If you have a smaller account or have more than ten years until you retire, statistics show you will be just fine. Under no circumstance should you think you are avoiding fluctuations though.
Myth #2 — You can’t have an IRA if you have a 401k
I’m not sure who started this one but they were totally wrong. You can have a 401k and be contributing to it, AND have an IRA as well. When you leave your job you can roll that 401k into your IRA and have one, larger account.
I help people with this all the time at JazzWealth.com, and there is NEVER a fee for doing this.
Now, you should know that you may not be able to deduct some or all of your IRA contribution if you have a 401k at work and exceed certain income limits. Whether you are single or married will also come into account as well.
Myth #3 — Investment Professionals know how to beat the market.
This one is easy to understand why people think this is true. In any other part of your life, a professional may be able to beat the price of another professional, or at least be more knowledgeable. In the investing world this can also be true to, BUT statistically, as a whole investment professionals do not know how to beat the market.
There are many traders that can beat the market, but that is not your goal. Your goal is to find what you want out of your retirement investments and then build a portfolio appropriately.
You are not a stock picker, you are an investor.
If your plan calls for trying to beat the markets then I wish you well, but what is it you are really looking for? That’s the question. Dream it, then build it and let others worry about performance.
Myth #4 — A good mix of stocks and bonds is all you need.
Well, this used to be true, but we are living in an era of interest rates you will never see EVER again. This has caused the traditional portfolio of stocks and bonds to underperform severely and investors are looking for more juice!
Having the right person build a portfolio for your goals is by far the most important part of the equation. If your advisor or investment planner is outdated or using strategies from even 15 years ago, it may be costing you.
I can help you with your investments and I invite you to go to JazzWealth.com, click on schedule a call and tell me when it’s best to speak with you. The only thing we have to sell is ourselves and our clients ALWAYS keep their accounts in their name.